Oral Answers to Questions

NORTHERN IRELAND

The Secretary of State was asked—

Devolved Government

Martin Smyth: If he will make a statement on the political process towards re-establishment of devolved government in Northern Ireland.

Andrew MacKay: If he will make a statement on the restoration of devolved government.

David Taylor: What assessment he has made of the implications for the peace process of the recent theft from the headquarters of Northern Bank in Belfast.

Gregory Campbell: What plans he has to convene talks between political parties on a political settlement in Northern Ireland.

Paul Murphy: As I said in my statement to the House last Tuesday, I deeply regret the fact that progress towards the re-establishment of devolved government in Northern Ireland has been put in jeopardy by the Northern bank raid.
	I cannot forecast when it will prove possible to re-establish an inclusive power-sharing Executive, which the Government continue to believe provides the best long-term guarantee of peace and stability, and we shall not abandon our commitment to that.
	I am in the process of talking to the Northern Ireland parties, with a view to hearing at first hand their assessments of the current position and their views on a number of difficult questions that now face us.

Martin Smyth: I welcome the Secretary of State's response, but how can the people of Northern Ireland be assured when there are denials of the bank robbery on the part of those who hitherto denied certain incidents in the past, such as permitting a young lad to return to Londonderry, telling his mother that he would be safe and then ordering his execution? How can we rest with any sense of trust and peace with that sort of nonsense going on?

Paul Murphy: The hon. Gentleman is right in pointing out in his last few words the significance of all this for the trust, confidence and faith between parties that must exist before we can get the restoration of the institutions in Northern Ireland. I believe that the Chief Constable was right in his assessment; the Irish Government believe the same; and I think that the people of Northern Ireland believe it as well. The issue now is how we get into a situation where we can restore those institutions, but before we can do that, we have to restore the trust, which is exactly what the hon. Gentleman referred to.

Andrew MacKay: The Secretary of State will be aware that the whole House has huge sympathy with his predicament. He has been very badly let down by the republicans. Can he confirm the following facts: first, Sinn Fein and the IRA are inextricably linked; secondly, it would be impossible to have in devolved government people who have carried out such a large criminal act?

Paul Murphy: Yes, and my right hon. Friend the Prime Minister said precisely that. The issue that has caused this problem is that of criminality, and that issue must be addressed before we can restore the institutions—not least because, as I suggested in my last answer, we simply will not get politicians, party leaders and people who have been elected in Northern Ireland together unless that trust is restored.
	The other issue is that, of course, as dramatic and big as the bank robbery was, we must not forget the other aspects of criminality that go on, day in and day out, in Northern Ireland, in loyalist as well as republican areas. We must stop that criminality, as otherwise we get a society that is not wholesome. People have had their minds concentrated because of the events of the past few weeks, and perhaps in some ways that is not a bad thing, because we can tell the people of Northern Ireland that we will concentrate on trying to end that criminality and ensuring that all parties that are in the Executive abandon any idea of linkage with groups that involve themselves in any criminality.

David Taylor: Following last night's denial by the Provisional IRA that it was involved in last month's Northern bank robbery, the Police Service of Northern Ireland has asked why the statement has been made now, not three weeks or so ago, and the Secretary of State has said that he still concurs with Chief Constable Orde's judgment that IRA-Sinn Fein are implicated in the crime. If that is so, why does he not impose on Sinn Fein the penalty of exclusion—for, say, 12 months—from a new power-sharing Executive?

Paul Murphy: The issue of exclusion from an Executive would arise, of course, in the event of an Assembly being up and running, and rules are laid down for that. The Independent Monitoring Commission would report to the Assembly. If the Assembly did not take a decision on that, it would come to me in terms of exclusion. At the moment, of course, there is no Assembly, but the issue still goes back to the fact that there must be trust among the parties for an Executive to be formed. There were considerable negotiations leading up to Christmas that, in the end, did not work. That was a great pity, but at the end of the day, unless we tackle the criminality, we will not get the trust for the parties to get together. Whatever the reasons behind exclusion and all the rest of it, that is the fundamental problem that we face. Both Governments agree that the IMC should report earlier than in April. We have not yet decided the details. Of course, we will request the IMC to do precisely that; and of course it has in its remit the possibility of sanctions and penalties.

Gregory Campbell: How can the Secretary of State reassure people in Northern Ireland that in discussions that he will have with the political parties he will not countenance bank robbing, gun smuggling, gangsterism and terrorism as any part of a process aimed at getting a satisfactory form of devolved government back in Northern Ireland?

Paul Murphy: I agree with the hon. Gentleman. I have already talked to him and his party, and doubtless we will have more meetings as the weeks go by. It is important for us to talk to parties about how they think we can move forward, and part of those discussions will deal with the possibility of establishing scrutiny over me and my fellow Ministers. In addition to that, it is important that we emphasise the issue of criminality during any discussions with parties. We must make it clear to parties that bank robberies and criminality in any form simply do not form part of a modern, democratic, non-violent political society in Northern Ireland. Such activities cannot continue, because they corrupt society.

Tony Cunningham: Does my right hon. Friend agree that the unity of the British and Irish Governments in putting pressure on the IRA to cease paramilitary activity should continue and be encouraged?

Paul Murphy: One of the important aspects of the past couple of weeks has been the way in which the British and Irish Governments have reacted in exactly the same manner to the bank robbery. This week I met Dermot Ahern, the Irish Foreign Minister, and there will be a formal meeting of the British and Irish Governments in Dublin in just under a fortnight to determine where we are. It is important that both Governments take the same view on criminality, as we do, and especially on how the raid on the bank has had grave consequences for the political and peace processes in Northern Ireland.

Eddie McGrady: The Secretary of State said that the past process was brought to a halt by criminality. Does he agree that the joint declaration following the Leeds series of talks indicated that paramilitarism and criminality were debarments from future talks? What then happened in respect of the heists and robberies at Makro and Gallahers and the abduction of Bobby Tohill? Were they not acts of criminality carried out during the talks process? What was new that meant that this specific criminality brought the process to a halt? If the Secretary of State gets back to the talks, will he go back to the basics of the Good Friday agreement and make them inclusive of all parties in Northern Ireland that subscribed to that agreement? The people of Ireland—north and south—endorsed the principle of inclusivity on a proper basis for such talks.

Paul Murphy: Yes, and one of the great benefits of the process in which my hon. Friend was involved in the lead-up to the Good Friday agreement was the fact that all parties were in Castle buildings making decisions together. There is no real substitute for that. However, I remind him that although that was a major principle behind how we arrived at the talks, a further principle of the Good Friday agreement was that there should not be criminality and that bodies such as the IRA and loyalist groups should not be associated with parties regarding criminality. It is important for hon. Members and people in Northern Ireland to realise that the bank robbery in Northern Ireland violated the Good Friday agreement and the principles that lie behind it. The Good Friday agreement was not about continuing criminality and paramilitary activities, but ending those things.

Michael Mates: I am sure that everyone will sympathise with the position in which the IRA has put the Secretary of State and his Ministers through its blatant disregard for the letter and spirit of the Good Friday agreement. Does he agree that several issues have been on hold for some months in the hope that we could get a devolved government so that the Assembly, if it could come together again, could make decisions that needed to be taken? Now that it is clear that there will be no progress on that front for many months, if not years, may I urge him to implement the measures that have been held up and thus give the people of Northern Ireland firm government at least, even if it has to be the second best—the continuation of direct rule?

Paul Murphy: The right hon. Gentleman's point about second best is right. We have to get the best, which is local Ministers taking decisions locally and being held accountable by local people. That is the aim of us all. But of course the right hon. Gentleman is correct: government has to continue, decisions have to be made and there has to be good governance in Northern Ireland, albeit through direct rule. Our job is then to consult as widely as we can with people in Northern Ireland, including the political parties, when we make vital decisions.

Helen Jackson: The Secretary of State is right to see this appalling crime in the context of the wider future for Northern Ireland and its potential devolution. Does he agree, however, that Sinn Fein should take that crime as its opportunity to make a clean break with the criminal and IRA elements in the communities that it is supposed to be representing politically?

Paul Murphy: My hon. Friend makes an important and interesting point. If that break with criminality does not come, we really have no hope of getting the institutions in Northern Ireland up and running again.

Lembit �pik: We all recognise the crucial importance of tackling the deep divisions in Northern Ireland society, but it is now more than a year since the consultation on A Shared Future ended. Is the Minister aware that it identified continuing communal conflict and tensions, but little evidence of significant increases in shared education and housing? Given that the consultation led to specific strategic and tactical recommendations, both national and local, may I ask when the Government intend to publish their action plan based on A Shared Future?

Paul Murphy: The new policy framework is currently at the final draft stage. My right hon. Friend the Minister of State and his officials have engaged in consultation with all parties and other stakeholders in Northern Ireland. Publication is expected in late February or March, and an action plan is expected to follow in the autumn.

Harry Barnes: In an earlier answer, did not my right hon. Friend put the cart before the horse? In order to set up the Executive, surely there needs to be the exclusion of Sinn Fein, rather than the other way round.

Paul Murphy: We must never get away from the central issue that this bank robbery has highlighted: criminality. We have to resolve that in order for a fully inclusive Executive to be established. For a voluntary coalition to work, it would have to involve nationalists and Unionists. The parties are making suggestions to me about other methods by which we could improve scrutiny in Northern Ireland; whether that is by having an Assembly without an Executive, as some parties have suggested, we will have to wait and see. At the end of the day, we have to concentrate on stopping criminality as the major issue for us in Northern Ireland.

David Lidington: I am sure that the Secretary of State will have noted the comment of a very senior Sinn Fein negotiator that the abduction and murder by the IRA of Mrs. Jean McConville, mother of 10, was not a criminal act. Does not that single comment indicate the distance that Sinn Fein and the IRA still have to travel before they really understand what democratic and peaceful politics is about?

Paul Murphy: The abduction of Mrs. McConville, who was, as the hon. Gentleman said, a mother of 10, was a wicked criminal act, and to suggest otherwise is preposterous. No political party can define what a crime is in Northern Ireland, or anywhere else for that matter. I think that everybody in the House and in Northern Ireland would recognise that that was a wicked, terrible crime, which everybody condemned.

David Lidington: There is no difference between the Secretary of State and myself on that.
	Will the right hon. Gentleman make it clear in his conversations with the political parties that the Government will not allow the IRA to treat guns, private armies and criminal empires as some kind of bargaining chip to be traded for political concession or meetings at No. 10; that giving up crime and violence is a condition of inclusion in democratic politics and in government; and that all the powers and resources of both the British and the Irish Government will be directed at breaking the grip that both republican and loyalist mafias still have on too many communities in Northern Ireland?

Paul Murphy: I very much agree with the hon. Gentleman. As I have said repeatedly this morning, there is no question of having an inclusive Executive until the problem of criminality is resolved. We simply cannot have our communities in Northern Ireland, whether in loyalist areas or in republican areas, bedevilled by criminality and paramilitarism.

Nigel Dodds: Given the continuing failure of the IRA and Sinn Fein to abide by exclusively peaceful and democratic means, and given, in the IRA statement last night, their contemptuous refusal to face up to the truth and accept their involvement in criminality, terrorism, paramilitarism and so on, when will the Secretary of State reflect the anger of the community across the board in Northern Ireland, come to the House and tell us what action he will take? When will he move ahead with those parties that want proper devolved government up and running in Northern Ireland and stop allowing the criminals of Sinn Fein-IRA to hold the rest of the community to ransom?

Paul Murphy: First, because he has attended meetings with me, the hon. Gentleman is conscious of the fact that I have to talk to his and other parties in Northern Ireland to see where the future lies in terms of devolution and the institutions. I repeat that we cannot have an Executive as it is envisaged in the Good Friday agreement unless we tackle criminality, and we cannot have a voluntary coalition unless it contains both nationalists and Unionists. There might be other ways in which we can exercise democracy in Northern Irelandfor example, through the Assembly without an Executiveand, like my Irish counterparts, I am perfectly willing to consider all the aspects of strands 1, 2 and 3. What is important is that we continue the dialogue and aim for local involvement in decision making in Northern Ireland. The hon. Gentleman is right to point out that many people in Northern Ireland, not just politicians, want a devolved Administration in which their politicians can be held to account.

Roy Beggs: The Secretary of State has shown extreme patience in trying to find a political way forward, but what useful purpose can be served by further talks with Sinn Fein-IRA, whose spokesperson, P. O'Neill, is an undoubted liar? For how much longer will the representatives of truly democratic parties in Northern Ireland be denied the opportunity to represent the law-abiding electorate?

Paul Murphy: I have little to add to my previous answer on what we have to do to get a voluntary coalition or the Executive as it is envisaged in the Good Friday agreement. However, there is sense in talking to representatives of Sinn Fein, not least because we can emphasise to them the significance of what has happened since the bank raid and the importance of ending criminality in Northern Ireland. We have to make it clear to them that that is the purpose of the Government, the Irish Government, all the people of Northern Ireland, and all Members of this House.

Ministerial Accountability

Andrew Turner: What steps he is taking to ensure there are mechanisms for accountability of Ministers in his Department to electors in Northern Ireland.

John Spellar: As my right hon. Friend the Secretary of State said to the House last Tuesday, we recognise the concerns that a number of people have expressed about the accountability of direct rule Ministers. We will reflect carefully on ways in which the existing accountability mechanisms may be strengthened and supplemented, including proposals put forward by some of the parties in Northern Ireland.

Andrew Turner: A moment ago, the Secretary of State mentioned the possibility of having an Assembly without an Executive. Is he willing for his Ministers to be accountable to that Assembly?

John Spellar: The Secretary of State rightly said that we have had a number of suggestions, some of which are variations of the one that the hon. Gentleman just described. We have to engage in discussions, and my right hon. Friend and I are discussing with political parties how to move on, but we have to get some common ground between the parties on such issues.

Seamus Mallon: The Minister might agree that at a time like this there is always the temptation to do something for the sake of doing something. Will he firmly resist the temptation to go down the James Prior road and have an Assembly without either authority or responsibility? He should not spend time and effort on something that will fail, but base the effort on the fact that only the two sovereign Governments acting together have the power and the authority to deal with criminality, illegal arms and illegal armies.

John Spellar: I echo the comments of my right hon. Friend the Secretary of State about the core importance of tackling criminality, which is re-emphasised by the hon. Gentleman. His party has views on how we could move forward to greater ministerial accountability. We are considering that, but obviously we need common ground between parties as to how we make progress, recognising the common desire for greater accountability.

David Lidington: Is not one way to ensure greater accountability to transfer certain powers away from Ministers to directly elected local authorities? In that context, will the Government press forward with the proposals under the review of public administration that seem to have been gathering dust in pending trays for far too long?

John Spellar: That is not right. The Under-Secretary, my hon. Friend the Member for Dudley, South (Mr. Pearson), has been having discussions with parties regarding the review of public administration. There is not unanimity even on, for example, the number of local authorities there should be. Discussions are taking place as to which powers should be delegated to those local bodies. Of course, that would have a significant impact on a future Assembly and Executive, so the matter is not straightforward. We take the point that devolving decisions to the most appropriate local level is important, but we need to achieve some common ground on it.

Iain Luke: Does my right hon. Friend agree that one way of increasing the accountability of Ministers to the people of Northern Ireland and making the workings of the House more accessible to them would be for the sittings of the Northern Ireland Grand Committee to take place in Northern Ireland during the suspension?

Hon. Members: Hear, hear.

John Spellar: As my hon. Friend and those who cheered that comment know, there is not exactly common ground on that in the Northern Ireland Grand Committee. We continue through the usual channels to explore how that could be progressed, but we recognise that there are difficulties.

Northern Ireland Assembly

Lady Hermon: What the total cost of the Northern Ireland Assembly has been since its suspension in October 2002; and if he will make a statement.

Ian Pearson: The cost of maintaining the Northern Ireland Assembly since suspension in October 2002 until 31 December 2004 has been 53.5 million. That comprises 23.2 million for costs relating to Members and political parties, 20.2 million for costs relating to Assembly staff, and 10.1 million for property, accommodation and business service costs.

Lady Hermon: Can the Minister explain the moral justification for continuing to squander 2 million per month on a phantom Assembly at Stormont?

Ian Pearson: It is important to recognise that the Assembly machinery must be maintained for when devolution is restored. As a Government we carefully monitor the situation. The number of Assembly staff has been reduced from 403 to 292, and about 40 per cent. of those have been fully or partially redeployed. We have saved about 15 million during the present financial year by allowing staff to go to work for other departments. We will continue to keep these matters under review.

David Burnside: Rather than continuing the phantom, empty, inoperative Assembly, should not the Government move ahead and give us accountable government by speeding up local government reform, getting rid of the health and education quangos and giving us a tier of local administration on top of Government, similar to the way in which England and Wales are governed?

Ian Pearson: I agree that it is important that we move forward with the review of public administration, which the people of Northern Ireland clearly want to see. As the hon. Gentleman knows, I have been having discussions with a range of political parties during recent months, and I will continue to do so. We are just finishing some work on local identity, and I hope to have a firm proposals paper ready for consultation either at the end of February or early in March, which I hope will fully address the issues that he rightly raised.

PRIME MINISTER

The Prime Minister was asked

Engagements

Ann McKechin: If he will list his official engagements for Wednesday 19 January.

Tony Blair: If you, Mr. Speaker, and the House will allow me, before listing my engagements, I will once again briefly update the House on the current casualty figures from the tsunami in respect of the British missing and dead. The number of category 1 missingthose most likely to be lostis, including the 53 confirmed dead, now 274, which is down from 410 last Wednesday. The category 2 figurethose unaccounted for in the region but not in the highly likely categorynow stands at 360. That is down from over 600 last Wednesday.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Ann McKechin: This week, Dr. Jeffrey Sachs presented his report on the millennium development goals to the United Nations, and showed how far short the world is of reaching those targets. When 150,000 children in Africa die each month from malaria alone, and when 114 million children are denied even basic education, does my right hon. Friend agree that, when the G7 finance leaders meet next month, we should press them for substantial increases in debt relief, and to use the International Monetary Fund gold reserve to achieve it?

Tony Blair: I entirely agree with what my hon. Friend says. Indeed, my right hon. Friend the Chancellor announced that the UK would pay its share of the debt service owed to the World Bank and African Development Bank on behalf of low-income countries that could then use the debt service reduction for action on poverty, health and educationthe very things that the millennium development goals deal with.
	We will press other G7 countries to join this initiative. It is important that they do and I hope that Europe joins this initiative as well. We can then make sure that the money that these countries desperately need, scarce enough as it is, is not going to pay billions of dollars-worth of debt service repayments.

Michael Howard: I am grateful to the Prime Minister for updating the House on the latest figures for victims of the tsunami.
	The appalling photographs in today's newspapers bring shame on our country, but we should recognise that they in no way reflect the true character of Britain's armed forces. While the current court martial will decide on individual issues of guilt or innocence, what steps will be taken to investigate the circumstances in which conduct of the kind alleged can take place?

Tony Blair: First, let me say that everyone finds those photographs shocking and appalling. There are simply no other words to describe them. However, in fairness to our armed forces, I want to make two points. First, the difference between democracy and tyranny is not that in a democracy bad things do not happen, but that in a democracy when they do happen people are held and brought to account, and that is what is happening under our judicial system. Secondly, the vast majority of those 65,000 British soldiers who have served out in Iraq have done so with distinction, with courage and with great honour to this country. So while we express in a unified way our disgust at those pictures, I hope that we do not allow that to tarnish the good namefully deservedof our British armed forces.
	I can also assure the right hon. and learned Gentleman that we will do everything that we can the Army is doing this alreadyto investigate the circumstances surrounding these matters. The very fact that these courts martial are being brought is an indication of how seriously the Army takes them.

John Hume: Given the Chancellor's positive statement on sending assistance to the poorer countries of the world, and given that the poorest countries in the world are those without education, is not education one of the best forms of assistance that we can send, because it will enable such countries to become totally self-sufficient in a generation or so?

Tony Blair: My hon. Friend is right that investment in education is the best investment that we can make. It is worth pointing out that measures led by this country have already been taken on debt relief. For example, Uganda has been able substantially to increase the number of children in primary education, precisely because it has been able to spend money on education. That is why it is so important that the initiative announced by my right hon. Friend the Chancellor is extended to other countries and that they agree to it.

Charles Kennedy: All of us agree with the sentiments expressed earlier by the Prime Minister on the publication of the photographs of abuse and I am sure that he will agree that the photographs' very circulation is likely to increase the difficulties and dangers for our troops, who are good and honourable, in Iraq. What is his assessment of the impact of the circulation of those images on likely levels of violence? Given the reports of bombings today, does he think that there may yet be a need for additional British troops to bolster the safety of the troops who are currently in position?

Tony Blair: On the last point, the additional deployment for the purposes of the election is satisfactory and sufficient, and I am not aware of any request for additional troops. On the first pointwe saw this when pictures of American soldiers were publishedI think and hope that people in Iraq understand that the fact that we are taking action and prosecuting people who we believe may have been guilty of offences indicates that we do not tolerate that type of activity in any shape or form. It is worth emphasising that Iraqis to whom I spoke on my visits to Basra have paid tribute to the British armed forces' work.
	Over the next few weeks, Iraqis will have the chance to participate in their first ever democratic elections. Millions of them want to take part and I am sure that they will. According to the United Nations, the vast majority of Iraqis who are allowed to participate want to participate, whatever part of Iraq they come from. In part, they can do that only because of the courage of British soldiers, who are remaining in Iraq to help them reach the state of democracy that the Iraqis want.

Charles Kennedy: On troop numbers, given that the Governments of Holland, the Czech Republic and Portugal have all indicated that they will start a phased withdrawal of their troops from the British sector in Iraq over the coming months, what is the likely consequence for our troop numbers? For example, does the Ministry of Defence plan to send in more troops after the election to plug any gaps left by the withdrawal of those forces?

Tony Blair: No, there are no plans to expand the British contribution. It is correct that some of those countries that had a time-limited commitment to Iraq will act in accordance with it. For example, the Dutch will withdraw their troops at a certain point after the election process. At the same time, however, the Iraqis' capability and capacity in relation to armed forces, police and civil defence is being developed all the time. It cannot be emphasised too often that we do not want to stay for a moment longer than we need to and that the Iraqi people do not want us to stay for a moment longer than we need to. It is a question of staying until the Iraqis' capability is sufficiently robust that they can look after their own security. Everything that comes out of Iraq makes it clear that the people who are causing terrorism and insurgency do not represent the vast majority of Iraqis or even the vast majority in the communities around Baghdad. If they were left to it, those people would be very happy to live in a free democracy, as would the rest of us.

Neil Gerrard: I am sure that the Prime Minister knows about my Bill, which I have introduced with cross-party support, to require approval by a vote in Parliament before British forces are sent into armed conflict. Will he support those proposals, so that no future Prime Minister can ignore the important precedent that he set when we had a vote, whether or not some of us liked the result, on Iraq, and will he consider setting another precedent by providing Government time in which to debate my Bill?

Tony Blair: I thank my hon. Friend for his kind acknowledgement that we provided an opportunity for this House to debate the conflict before entering into it. On the rest of his points, I am afraid that I will have to disappoint him. As I have said many times before, it would be unthinkable for a country to go to war against the wishes of Parliament, but it is not right to constrain the prerogatives that exist at the moment. We did allow people to have a vote before the Iraq conflict, but there may be circumstancesI cannot foresee them, but there may bein which action has to take place very quickly. I will study my hon. Friend's Bill carefully, but we would have to consider the detail of it before any such change was made.

Michael Howard: Before the last election, the Prime Minister promised not to increase the basic or top rate of income tax. Will he give the same pledge today?

Tony Blair: We have of course honoured that pledge. In respect of any pledges that we make at the next election, the right hon. and learned Gentleman will have to wait for our manifesto. Of course, there will be a Budget in the meantime. I would point out to him that we have not raised the top rate of tax and that we have actually cut the basic rate.

Michael Howard: Everyone will have noticed that the Prime Minister is not prepared to give that pledge. Now, will he promise not to increase national insurance contributions?

Tony Blair: As I said before, we will give the details of any tax commitments we make in our manifesto. I might point out to the right hon. and learned Gentleman that the Government of whom he was a member fought an election specifically on not putting VAT on fuel, and then put VAT on fuel, so we will take no lessons on broken promises on tax from him.

Michael Howard: The Prime Minister promised not to put up taxes at all. He said that he had no such plans. He said that no one should assume that this Government would increase national insurance contributions, and the first thing that they did after the election was to increase national insurance contributions.
	Every independent expertthe International Monetary Fund, the Organisation for Economic Co-operation and Development, the CBI, the British Chambers of Commerce, the National Institute of Economic and Social Research, The Economist, the Institute for Fiscal Studiessays that the Government are spending more than they are raising and that a Labour Chancellor would have to put up taxes. Why does the Prime Minister think that they are all wrong?

Tony Blair: I think that they are wrong for the very simple reason that the Treasury forecasts on the economy have been proved right. The right hon. and learned Gentleman was the person who told us that we would have a recession as a result of Government policy.
	As we are talking about tax commitments, I have been having a look at the right hon. and learned Gentleman's supposed tax commitments. I hope that he will now publish the detail behind the so-called James review, because it is actually based on the Government's own savings as set out in Sir Peter Gershon's report. It also has a set of completely incredible savings. To give just one example, the right hon. and learned Gentleman is going to save almost 1 billion from the commissioning of care by primary care trusts, when the total amount of care commissioned by PCTsthe administrative costsis 90 million. That is one example, and I will give many, many more. It is a long list, but we will have time to explore it. In addition, he is going to cut the new deal, despite the fact that it has helped hundreds of thousands of people into work, on the very day when unemployment has yet again fallen. That is the difference between Tory cuts and Labour investment.

Michael Howard: The Prime Minister has got his figures on James wrong, just as the Transport Secretary and the Chancellor of the Duchy of Lancaster got them wrong on Tuesday. We have published whole of that report173 pages of it; it is on the Conservative party website. Is it not absolutely clear that the Prime Minister plans to do what he has always doneto put up taxes in the first Budget after a general election? Is it not clear that the choice facing the country is between more waste and higher taxes under Labour and value for money and lower taxes with the Conservatives?

Tony Blair: I am delighted that the right hon. and learned Gentleman is into that argument because he says that everything is published on the website, but I have been having a look at what is published. For example, it says that, by changing the role of regional development agencies, he will save 365 million, yet the total administrative costs of all RDAs are far less than that figure. It is regeneration programmes in local communities and not bureaucracy that will actually be cut. He says that he will cut 1 billion by scrapping the sustainable communities plan but that figure includes 400 million that is spent on social housing and on helping pensioners and others get a better standard of living. That is not waste, that is cuts in front-line services. I can do no better on his record on tax than to quote this:
	The sad truth is, when we were in office we made promises on tax we couldn't keep.
	Who was the author of that statement? The shadow Chancellor.

Michael Howard: The right hon. Gentleman is wrong on social housing, too. We have spelled out in detail how we shall be able to provide more social housing than the Government. Everybody knows that the Government waste money. The Gershon report says that they waste 21 billion of taxpayers' money, and we have been able to provide more savings. Have there ever been a Government who taxed so much, wasted so much and achieved so little?

Tony Blair: The right hon. and learned Gentleman is keen to get away from the detail of that but he is not going to in the days ahead. Let me give another example of his so-called cuts. He says that he will scrap the Small Business Service, which means approximately 400 million

Mr. Speaker: Order. I say to the Prime Minister that he must concentrate on the policies of his Government. I say to the Leader of the Opposition that he has commented on his policies when he should be asking a question. Perhaps the Prime could oblige me.

Tony Blair: Absolutely right, Mr. Speaker, and therefore let me make a commitment on our policy: we will keep the Small Business Service, not cut it. We will keep the new deal, not cut it. We will keep the money that goes into regeneration, not cut it, and we will keep the money that goes into health care and not cut it. We will never promise to cut taxes and spend morethe promises that the previous Conservative Government made. What did they end up with? Boom and bust. [Interruption.]

Mr. Speaker: Order. The Chairman of the Catering Committee, the hon. Member for Wolverhampton, South-East (Mr. Turner), should know better.

Eric Martlew: If we can get away from elections and back to the reality of my constituents for a moment, I am conscious that my right hon. Friend is aware of the effects of the recent disastrous floods in Carlisle. The latest position is that thousands of people have been forced out of their houses, perhaps for at least eight months, and 260 businesses have been badly affected. So far, the Government's response has been good and I hope that that will continue. However, will he ensure that the new flood defences that were planned will be modified and that work on them will be started as soon as is feasible? Will he give a commitment that they will be of a standard that would have withstood the water that caused the recent flood?

Tony Blair: I express my sympathy to my hon. Friend's constituents who have been affected by the flooding. I understand their concern, since more than 3,000 houses have been flooded and many more have suffered wind damage. The Environment Agency was already considering the options for a new flood defence scheme to give added protection to Carlisle. I note that, as a result of what has happened, it and the Department for Environment, Food and Rural Affairs are considering how they can ensure that any new flood protection scheme tries to tackle the problem that has affected my hon. Friend's constituency. We understand the urgency of that. As I said when I spoke to him the other day, I shall take a personal interest in ensuring that that is done properly.

Eric Forth: Will the Prime Minister pledgeand tell his Chancellornot to raise taxes at all?

Tony Blair: As I have already said, the Chancellor will set out the detail in the Budget. When we come to the election, we will set out our promises on tax as on everything else. We will not make promises that we cannot keep. In particular, we will not say that we can somehow cut everyone's tax and increase spending without that resulting in a serious problem for the country. Not merely on the detail but on that general principle, the right hon. Gentleman and his party have lost any minimal credibility that they had, and we will enjoy pursuing them on that issue between now and polling day.

Dennis Skinner: Does the Prime Minister recall that, in the past two years, the Government have had to intervene in regard to railway firms that were not pulling their weight and, in one case, to a firm that was being neglectful on safety? Is he aware that the coal industry is now suffering from the same problem? UK Coal, the largest employer in the industry, is not only neglecting safety but running down the few remaining pits. I would expect the Government to do the same for the energy industry as they did for the railway industry. They should intervene, get rid of UK Coal and put somebody in there who can be trusted to save the mines.

Tony Blair: I will certainly look into the point that my hon. Friend has raised on UK Coal. Part of the problem comes from the way in which privatisation took place, both in transport and in the coal industry. The result of that has been the waste of many billions of poundswe have been debating waste todayand the loss of jobs in mining communities.

Charles Hendry: At the last election, Labour sent a text message to young people that said:
	CLDNT GVE A XXXX 4 LST ORDRS? VTE LBR ON THRSDY 4 XTRA TIME
	Given the increasing concerns about binge drinking, alcohol-related crime and antisocial behaviour, is the Prime Minister proud of that campaign?

Tony Blair: I have to say that this is the Conservatives' attempt, after the debate about the changes to the licensing law, which they supported at the time, to say that they were really against them. Let me explain the position to the hon. Gentleman. The fact is that the changes will introduce more flexible licensing. The number of clubs or pubs that will apply for 24-hour licences is very small, but there will be greater flexibility. The important point is that, in addition, there will be greater powers for police and local residents to object to licences to ensure that the minority of places that are causing the trouble are shut down. There are greater powers under the antisocial behaviour legislation to deal with people who are drunk and disorderly and causing trouble. As I said last week, the pleasure of the 95 per cent. of people who play by the rules and abide by the law should not be affected by the small minority who misbehave under the existing laws and would misbehave under any laws. The task is surely to deal with them specifically, and to deal with the pubs and clubs that are allowing them to misbehave in that way.

Fabian Hamilton: Will my right hon. Friend join me in congratulating the divisional commander of Chapeltown police, Chief Superintendent Howard Crowther, and his team on an operation last month that resulted in the removal and arrest of 180 drug dealers from the streets of Chapeltown? Does my right hon. Friend agree that the only way to sustain the freedom of the streets for the community is to adopt the kind of policies that this Government support, which ensure the social, economic and physical regeneration of suburbs such as Chapeltown? Does he also agree that if the Conservatives ever got back into Government

Mr. Speaker: Order.

Tony Blair: I congratulate Howard Crowther and his team on what they have done in Chapeltown, which I know is an example that is being studied elsewhere in the country. It is an example of the police working with the local community to use the new antisocial behaviour powers. It is important that they do that. The other point that my hon. Friend made is also important. This is not just about having tougher laws on closing the houses of drug dealers, seizing their assets and making sure that they are properly prosecuted through the courts. The other part of the equation involves regenerating some of these areas in terms of housing and employment. That is why it is so important that the money that we have set aside for this continues to be spent.

Tim Boswell: Six years ago, the average first-time home buyer paid no stamp duty. Last year, they paid 1,300. Will the Prime Minister have a cosy fireside chat with his Chancellor about that?

Tony Blair: We will publish over the next month proposals that will help first-time home buyers. For those families who are struggling to get on the housing ladder, it is important that we increase the supply of housing in a planned and orderly way that does not affect the green belt. It is no use Conservatives saying on the one hand that they are in favour of helping people on to the housing ladder and into the housing market, while on the other hand opposing all the measures necessary to do so.

David Marshall: My right hon. Friend will be aware of the considerable economic progress made in the city of Glasgow since 1997, with more than 50,000 new jobs being added to the city's employment base. Is he also aware, however, that the number of people classified as economically inactive remains at 100,000, which is one in three of the available work force? Will he consider what new initiatives and additional resources might be made available to the Department for Work and Pensions, Jobcentre Plus, Scottish Enterprise Glasgow and other local agencies, to enable them to help many of those on incapacity and related benefits back into work?

Tony Blair: My hon. Friend points out rightly that we now have record employment levels, with 2 million more jobs since 1997, long-term employment down by 80 per cent., and the number of young people on the dole having fallen by almost 80 per cent. since we came to office. He is also right, however, to say that there is much more to do. That is why it is important that the new deal programme is kept and extended, and that we help people on incapacity benefit who can work to get off benefit and into work. All of that requires an active policy for the labour market, which is precisely why, instead of savaging or privatising Jobcentre Plus, which is the policy of the Conservative party, we should ensure that we help more people off benefit and into work. Those 2 million jobs have not just been about the strength of the economy, important though that is, but about active Labour partyand labour marketmeasures to help people off benefit and into work, to give them training, child care and all the things that sometimes stand between them and a decent job.

David Trimble: The Prime Minister has known for some time that the republican movement was responsible for the Northern Bank raid. Because he has yet to develop a coherent response, he is in danger of giving the impression that after a little while he will welcome back through his door the biggest bank robber in British history. Does he realise the damage that that will do to himself and his party?

Tony Blair: First, I should say to the right hon. Gentleman that I do not in any shape or form dismiss the importance or seriousness of what has happened. We are now seeing what we do to find a way forward which ensures that those people who are democrats and committed to every aspect of the democratic process are able to find a way forward, and that those people who are not prepared to commit themselves to exclusively peaceful means do not hold up the process for everybody else. That is what we will consider. As he knows, such a proposal requires not only support in the Unionist community but support in the nationalist community, too. If I can, I still want to find a way forward that includes everybody. It must be said, however, that we can no longer have a situation in which political parties are associated with paramilitary groups that are committing either what we might call terrorist offences or ordinary criminality. There simply can be no place for that. Unless and until it is absolutely clear that things have changed fundamentally, it is difficult to see the way forward on that inclusive basis. But the challenge is not for us. The challenge is for those who have been engaged in that type of activity to realise that we cannot wait for ever while they make up their minds.

Bob Blizzard: Overall crime continues to fall in my constituency, with burglary down 33 per cent. last year. Will my right hon. Friend join me in welcoming the seven new community support officers who have just started work in Lowestoft? With 20,000 more CSOs planned nationally, can he tell us how many more new CSOs my constituency can expect to see and what more he will do to tackle antisocial behaviour, if we continue to invest in crime fighting rather than cut the Home Office budget as the Conservative party would do?

Tony Blair: My hon. Friend is right in saying that overall burglary has fallen, according to the British crime survey, by about 40 per cent. If one is a victim of burglary, however, is it no consolation to know that that is the case. It is therefore important that as well as the type of laws that we have introduced in relation to antisocial behaviour and drugs particularlyoften, burglary and acquisitive crime are linked to drug addictionwe increase the numbers of police and community support officers. I assure him that that programme will continue and be expanded in the way in which we have said, and that it is fully funded within the Government's programme. Community support officersopposed by the Conservative party when they were introducedhave in fact been tremendously popular.

Bill Wiggin: Will the Prime Minister look again at the decision as asked for by the colonel of the Royal Welsh Regimentthat Welsh regiments should be allowed to show their names in the same way as the Royal Regiment of Scotland?

Tony Blair: I will certainly look into that. I am aware of concern about it. I think that my right hon. Friend the Secretary of State for Wales is looking into it already, but I will ensure that I am properly acquainted with the facts as well.

David Clelland: Is my right hon. Friend aware that what has been described as the finest music auditorium in the world is not in Paris, not in Rome, not in New York, and not even in London? [Hon. Members: Where is it?] In fact, it is in Gateshead. When my right hon. Friend visits the new Sage music centre on the bank of the Tyne, which he will do fairly shortly, will he take the opportunity to congratulate all who have been involved with it, and in particular congratulate Gateshead's Labour-controlled council on its vision? Will he also ask his Ministers to co-operate fully with the council in its further efforts to develop the quayside area of Gateshead?

Tony Blair: Anyone who has visited the quayside area knows that what my hon. Friend said is absolutely true. The centre and, indeed, the whole development are a testament to the vision and leadership that have been offered locally. I think that that is one reason why people now consider the area one of the places to go in Europe, a fact of which my hon. Friend and his constituents can be very proud.

Points of Order

Julian Brazier: On a point of order, Mr. Speaker. May I ask what the arrangements are for amending Hansard? A few moments ago, the Prime Minister suggested that the official Opposition had voted with the Government on the Licensing Bill. We did of course oppose it on Third Reading.

Mr. Speaker: That is not a matter for me and it is not a point of order.

Tam Dalyell: On a point of order, Mr. Speaker. Have you received a request from either a Law Officer or any Minister to clarify the law of sub judice in relation to courts martial? The events in Osnabruck at least require clarification in relation to sub judice.

Mr. Speaker: That is not a matter for me.

Opposition Day
	  
	[2nd Allotted Day]

Value for Taxpayers' Money

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

George Osborne: I beg to move,
	That this House notes that the Government has increased taxes 66 times and has failed to give value for taxpayers' money; is concerned that independent commentators believe that taxes will have to be increased under the Government's spending plans; and calls for a change of direction away from the path of more waste and higher taxes to a path of value for money and lower taxes.
	The debate gives us a timely opportunity to discuss the Government's failure to give taxpayers value for money, a timely opportunity to discuss the tax increases that almost every independent expert now believes to be inevitable if Labour is re-elected, and of course a timely opportunity to discuss how we should be putting spending on a more sustainable basis, enabling us to cut taxes imposed on hard-working families.
	I welcome the presence of the Chief Secretary to the Treasury, because he has been the invisible man this week. As I have toured the television and radio studios, I have kept bumping into the Secretary of State for Transport, who has taken on the role of the Government's chief spokesman on spending. Obviously the purdah that applies to the Chancellor of the Exchequer in the context of election campaigning has been applied to the entire Treasury team, and they are all being kept under lock and key. I am glad to see, however, that the Chief Secretary has been let out on day release for this important debate.
	There is a danger that debates of this kind may become somewhat partisan, and we would not want that to happen, so let me begin by trying to establish cross-party consensus. I shall do that by agreeing entirely with what the Financial Secretary to the Treasury said recently:
	we're going to have an election . . . when people will say 'we've paid a lot of taxes but what has really been achieved with all that money?' . . . Too often a lot of money has been spent but very little seems to have been achieved.
	I agree. I am happy to work on the basis of that consensus: I want to establish that at the outset.

John Robertson: Will the hon. Gentleman give way?

George Osborne: I will certainly give way to the hon. Gentleman. Does he agree with the Financial Secretary that a lot of money has been spent but very little seems to have been achieved?

John Robertson: Does the hon. Gentleman not think that jobs are the most important thing, and it is in that regard that we get the best value for money in terms of tax? My right hon. Friend the Chief Secretary and his colleagues have done more than anyone else to get people back into employment.

George Osborne: I am absolutely delighted that I gave way to the hon. Gentleman, who agrees with the Financial Secretary that a lot of money has been spent but very little seems to have been achieved. We have established a consensus. On employment, I should point out that there are now more than 1.1 million people who are not in work, training, or educationmore than in 1997.

Adrian Bailey: (Lab/ Co-op) rose

George Osborne: I am happy to give way to the hon. Gentleman; perhaps he agrees with the Financial Secretary.

Adrian Bailey: What assessment has the hon. Gentleman made of the value for money of the poll tax, which was introduced by the Tory Government?

George Osborne: I was at school when the poll tax was introduced, and at university when it was abolished. I shall concentrate instead on what the current Government are doing, given the legion examples of waste under them, on which we can have a good three-hour debate.
	I was building on the consensus established by the Financial Secretary and the hon. Member for Glasgow, Anniesland (John Robertson). We agree with the Financial Secretary that people have paid a lot in taxes. There have been 66 tax increases

James Plaskitt: Will the hon. Gentleman give way?

George Osborne: I will do so in a second, but so that the hon. Gentleman is aware of the Government's tax record, which the Financial Secretary has helpfully outlined, I should point out that as a result of the 66 tax increases and this so-called progressive Labour Government, the tax burden now falls hardest on the poorest in society. There are taxes on pensions, petrol, mortgages, marriage, employers, employees and the self-employed, amounting to 5,000 per family. The hon. Gentleman is a member of the Treasury Select Committee. Does he agree with the assessment of the International Monetary Fund, the Organisation for Economic Co-operation and Development and the Institute for Fiscal Studies that taxes will go up if Labour wins the election?

James Plaskitt: I want to deal with 66 tax rises that the hon. Gentleman likes to citea figure at which he has arrived, I think, by working through the Red Book and itemising all the lines that give a tax increase. He is right: there are 66 tax increases, but will he confirm that according to the same accounting methodology, there are also 232 tax cuts?

George Osborne: Any tax reductions introduced by this Government have been more than outweighed by the massive increase in taxation, which amounts to 5,000 per family. But I am glad that this consensus is growing and that the hon. Gentleman accepts that there have been 66 tax increases. It is very useful, as we approach a general election, to have a Labour member of the Treasury Select Committee agreeing with us.

Peter Pike: There is one important tax cut that the hon. Gentleman has not mentioned: the cut in VAT on fuel. The current Leader of the Opposition was a member of the Conservative Government, who intended to increase VAT on fuel to 17.5 per cent. ultimately. They never implemented the second stage of that increase because they were defeated by the Labour party, which on entering government immediately reduced VAT on fuel to the minimum level of 5 per cent. That reduction has benefited every taxpayer in this country.

George Osborne: The hon. Gentleman did not mention fuel duties, which have rocketed under this Government. Indeed, because of their very nature, and because of the pledges concerning the basic and top rates of income tax that the Prime Minister made during previous election campaigns, many of the stealth taxes have been imposed through duties. Such taxes fall hardest on the poorest in society, which is why the Office for National Statistics points out that the greatest tax burden is now paid by the poorest quintile.

David Borrow: rose

Patrick McLoughlin: rose

George Osborne: I am happy to give way to my hon. Friend the Member for West Derbyshire (Mr. McLoughlin).

Patrick McLoughlin: For the record, I agree with the Financial Secretary that a lot of money has been spent and wasted, but does my hon. Friend agree that this is not really a new error? The Government agree with that assessment, which is why they commissioned the Gershon report, and why the Chancellor announced at the Dispatch Box that he wanted to sack 80,000 civil servants. Should we not welcome the fact that the Government have belatedly recognised that they have spent all this money and wasted it?

George Osborne: My hon. Friend is absolutely right: the Government do recognise that fact, but sadly, they are not doing what they said they would do. I am sure that my hon. Friend is an assiduous reader of The Guardian, so he will have seen the article on page 14 of today's edition, entitled Axing Whitehall jobs is smoke and mirrors. It begins:
	Gordon Brown's plan to make savings by axing 84,000 jobs in Whitehall and relocating another 20,000 staff is largely an illusion.
	That is because the Chancellor has not implemented his proposals. We accept the Gershon recommendations, but the difference between us and the Government is that we would implement them.

Stephen McCabe: Did the hon. Gentleman also read the front-page story in The Guardian today about the Maypole nursing home in my Hall Green constituency? Twenty-eight elderly people died there in the space of 12 months in what can best be described as unusual circumstances. I understand that the Conservative strategy on value for money would do away with strategic health authorities and the Commission for Social Care Inspection. We would not know about the situation at the Maypole nursing home were it not for the diligent work by those bodies, so could he tell us what plans he has to replace them with other organisations?

George Osborne: I do not know the exact details of the case, although I have read about the nursing home in the hon. Gentleman's constituency, and heard about it on the radio this morning. If the hon. Gentleman seriously believes that a strategic health authority would do wonders for the patients of that home, I am afraid he is under a delusion. Strategic health authorities are a hugely bureaucratic waste of money. They do nothing to put money into front-line services, and when taxpayers in our constituencies pay their taxes to fund the NHS they do not expect it to end up in the hands of bureaucrats. The public, I suspect, do not even know that strategic health authorities exist.

Adrian Bailey: Will the hon. Gentleman give way?

George Osborne: I have already given way to the hon. Gentleman, and if he will allow me to proceed, I shall certainly do so again later.
	Returning to the consensus that I am trying to establish, as well as saying that taxes had gone up a great deal the Financial Secretary said that a lot of money had been spent. That is true, as Government spending has increased by 60 per cent. from 320 billion to 520 billion. The proportion of gross domestic product spent by the Government has increased from 37 per cent. to 42 per cent. I very much agree with the Financial Secretary that
	a lot of money has been spent but very little seems to have been achieved.
	Those remarks were endorsed by the hon. Member for Glasgow, Anniesland earlier. I salute his candour, and I also salute the candour of the Labour members of the Select Committee on Education and Skills, which produced a report this month on public expenditure in education. I recommend it to hon. Members, as it makes interesting reading. In the first paragraph of conclusions it says:
	The Chancellor's budget book for 2004 claimed a direct relationship between the increased investment in education since 1997 and improvement in GCSE results in particular. Our evidence showed that with lower levels of investment GCSE results had improved to at least the same extent in earlier periods in the 1990s. The Government needs to take great care in making claims about the effectiveness of increased investment in education in increasing levels of achievement which the evidence cannot be proved to support. Links between expenditure and outcome remain difficult to establish.

Julie Kirkbride: To add to the very good case that my hon. Friend is making, I can tell him that my own constituency in Worcestershire receives one of the lowest Government grants for education and schools, yet achieves some of the highest results, which merely proves what the Education and Skills Committee has finally and commendably put on the record.

George Osborne: I congratulate the schools in my hon. Friend's constituency. I agree that it is good that the Education and Skills Committee is telling us the truth, as is the Organisation for Economic Co-operation and Development.

Henry Bellingham: Is my hon. Friend aware that my local education authority, too, is doing extremely well and getting good results? A number of small schools in Norfolk want to use their own capital funds for doing minor building works, but Government rules prevent them from doing so, and they have to use the county council property services, which cost far more. Could my hon. Friend could look into that?

George Osborne: Under our right to choose, almost all the money in the education system will be directed through parents, so there will be no need for the huge bureaucratic layer of local education authorities in their current form to decide such things. Money will go where parents want it to go and where pupils go, which will dramatically improve standards in our schools still further.
	The OECDI am still trying to tell the House what it saidis an august organisation; the Chancellor often quotes it with approval at the Dispatch Box. The OECD said recently that the UK education system had fallen from fourth to 11th place in the world for science, from seventh to 11th for reading and from eighth to 18th for maths. On the extra spending in the NHS, the OECD said that growth in the volume of health care output had slowed down, compared with the first half of the 1990s. The OECD, the Education and Skills Committee and the Financial Secretary are all right when they say that a lot of money has been spent but little has been achieved.
	What is the reason for that failure? It is that the extra money has not been accompanied by reform. The Government have stumbled around in the dark, not knowing what to do with the public services. They have been through several phases. When they first arrived in Whitehall after the 1997 election, they immediately abolished the previous Government's public service reforms. Out went GP fundholding, trust hospitals and grant-maintained schools. The Government actually believed their own election propagandathat simply getting rid of those things would improve public services.

Kali Mountford: On public expenditure reform, when the hon. Gentleman's party was in government why did it not make the successful changes that Labour has made? I refer to planned expenditure in education. In my own area, heads of schools and colleges tell me that being able to plan ahead and have properly planned expenditure has not only allowed them to increase general expenditure on the education of their pupils, but has vastly improved standards and allowed them to make capital investment. That situation has come about thanks to important reform. Why did not his party do that?

George Osborne: I think that I have just had a glimpse of the speech that the hon. Lady is planning to give later. Perhaps she should have listened more carefully to what I was saying; I do not deny that the Government have increased the money going into education, but the point I was trying to make is that the money they have spent has not delivered the increased performance that they told us it would. In fact, when people look at the education system they see precious little evidence that it has delivered improved results, and that is borne out by the OECD and the Education and Skills Committee. That is because, as I was saying, we have been through these phases.
	First, the Government got rid of the public service reforms introduced by the Conservative Government. That did not work so they were frustrated, and in the late 1990s they decided to centralise everything and run it from Whitehall. It was like a tractor factory in the Urals; in came targets, task forces, 10-year plans and that kind of stuff. They called it modernisation. Things still did not improve, so the Government now declare that targets are dead and centralisation was a mistake. Decentralisation has become the Government's new buzzwordat least for the Prime Minister and the Chancellor of the Duchy of Lancaster, if not for the Chancellor of the Exchequer.
	In have come foundation hospitals, funding flows and earned autonomy for schools, which allon paper at leastlook suspiciously like the trust hospitals, GP fundholding and GM schools that the Government abolished in the first place. So after seven years of new Labour, they are back to square one, except of course that this lot cannot really let go.
	The experience of foundation hospitals showed that they are not actually prepared to hand over control to the professionals. The earned autonomy promised to successful schools in the Government's flagship Education Act 2002 has never been given to a single school. In other words, we sat through all the debates on that flagship Act, which was part of Labour's main manifesto at the last general election, yet not one school has achieved the earned autonomy that we had all those debates about.

Bernard Jenkin: On the question of earned autonomy, does it occur to my hon. Friend, as it does to me, what a falsehood that phrase actually is? The concept of earned autonomy merely corroborates the omniscience of the centre and the sovereignty of the Secretary of State over everything that happens in every school and every hospital.

George Osborne: My hon. Friend is absolutely right. The very concept of earned autonomy is that it is something handed down from on high as a reward rather than being integral to the system. Schools should have autonomy, parents should be able to send their children to the schools they want, and the money should follow each child. That is the way in which an education system should be run.
	Of course, the Government's instincts are to interfere and meddle, and the vast bureaucracy that they have createdthe 300,000 extra bureaucrats in countless new quangos, agencies, units and so onhave a vested interest in keeping power out of the hands of the users of public services: the patients and the parents. Sir John Stevens, the Metropolitan Police Commissioner, said recently:
	I have never seen so much inspection and monitoring . . . It is getting in the way of our business.
	If people want an explanation of why they do not see police officers on the street and why there are now more than 1 million violent crimes a year, they should perhaps listen to the Metropolitan Police Commissioner.
	Of course, the failure to reform means a failure to deliver. Public sector productivity has fallen for the past three years of published figures. The European Central Bank recently published a paper that found that if the UK public sector were as productive and efficient as others in the developed world, outputs would be 25 per cent. higher. Instead of reform and delivery, we have had waste on a huge scale. Of the 88,000 people employed to work in the education system in one year, just 14,000 are teachers and teaching assistants. The number of tax inspectors is rising twice as fast as the number of new doctors and nurses. There are more officials in the Department for Environment, Food and Rural Affairs than there are dairy farmers.
	We have seen two examples in the newspapers todaytwo reports from the National Audit Office. The NAO has again qualified the accounts of the Department for Work and Pensions because it says that benefit and fraud mistakes are costing taxpayers 3 billion a year. The report on the NHS IT system for patient choicea multi-billion pound system that was supposed to make 200,000 bookings last yearshows that it only made 63 bookings last year.
	It is not just the big ticket items that tell the story of waste under the Government; sometimes the small examples can be just as illuminating: the 1,000 chairs in the Ministry of Defence and the Cabinet Office taxi bill, which has gone up 1,000 per cent. under the Government. The Secretary of State for Trade and Industry said recently that
	when we talked about delivery, that may have been something of a mistake.
	One can see why when one looks at her own backyard. According to recent written answers, the Department of Trade and Industry has in the past few years spent 23 million on office refurbishment, 7.9 million on furniture, 30 million on overseas trips, 10 million on first-class travel and 120,000 on flowers. At least with the four-fifths reduction in the number of DTI civil servants, there will be less need for pot plants.
	Rarely in the history of politics have a Government spent so much and achieved so little. That has an economic consequence, and hon. Members do not have to take my word for it.

Adrian Bailey: Will the hon. Gentleman give way?

George Osborne: I am happy to give way, but perhaps the hon. Gentleman will tell mehe is versed in these economic matterswhether he agrees with the International Monetary Fund, the OECD and so on that taxes will go up if Labour wins.

Adrian Bailey: Perhaps the hon. Gentleman will answer my question. I understand that he was at school for a large proportion of this time, but previous Conservative Governments received a largesse of 87 billion from North sea oil and gas tax revenues, slashed public expenditure and raised taxes. What sort of example and what sort of credibility do the Conservatives have in arguing for value for money on that basis?

George Osborne: I was taught at school that Conservative Governments took the sick man of Europe and transformed the country into the most successful economy in the world.
	Let me talk about the present, rather than the past. I should like to quote the Prime Minister's chief economic adviserthe man who gave the Prime Minister his economic advice for seven years. Derek Scott says:
	Gordon Brown's economic inheritance was better than that of any previous Chancellor in living memory. But there are limits to the length of time that public spending can increase at a faster rate than the growth in GDP without causing problems. By the time I left Downing Street, Britain was approaching or had perhaps passed that limit. The regulatory burden had been increased, the tax system had become more complicated and the tax burden was rising too.
	I agree with the chief economic adviser to the Prime Ministermore cross-party consensus. Britain cannot carry on down the path of spend, waste and tax without storing up huge problems for the economy. That is what almost every independent observer of the British economy thinks, too. I have mentioned them already and I will mention them again. The IMF, the OECD, the ITEM Club, the National Institute of Economic and Social Research, the CBI, the chambers of commerce and the independent Institute for Fiscal Studies all now believe that the Government have created a structural deficit of anywhere between 8 billion and 12 billion.

David Laws: I want to find out how far we can press the consensus that the hon. Gentleman talks about. He has just cited the Institute for Fiscal Studies. Does he agree with the following comments, which it made yesterday:
	The proposed Conservative tax cuts would offset only about a seventh of the rise in the burden as a share of national income that the Treasury has pencilled in over the next fives years?
	So given the plans announced on Monday, would the tax burden still not rise, even under his plans?

George Osborne: I seem to remember that the IFS said that under a Labour or Liberal Democrat Chancellor taxes would go up, and under a Conservative Chancellor taxes would go down. That is a fair assessment. Indeed, the Liberal Democrats have a list of strange taxes on pets and all sorts of other things, but their proposal for a 50 per cent. top rate of income tax would give us a higher top rate of tax than France, Italy, Spain or Belgium. Perhaps the hon. Gentleman, who has worked in the City, will explain in his speech how he thinks that Britain could compete with a higher top rate of income tax than those countries, let alone many of the English-speaking economies of the world.
	Of course, it is an historic achievement to have a structural deficit after seven years of tax rises. I have to take my hat off to the Chancellor. He now faces a choice, as indeed does the country: higher taxes or spending that the country can afford. Which will it be? This week, we gave our answer. We would spend 12 billion less than the Government by the year 200708, and we could use that money to fill the budget deficit and to cut taxes on hard-working families. We would achieve that by making the specific savings identified by David James and his team of independent experts. I heard the Prime Minister earlier casting aspersions on David James. That is rather strange, as the Prime Minister hired him to sort out the mess of the millennium dome.
	I stress that the savings that David James and his team have found in the NHS and schoolsevery penny saved on bureaucracy, waste and unnecessary quangoswill be reinvested in the NHS and schools. We will radically reform those services so that they are driven by the right of parents and patients to choose, rather than by the diktats of Ministers, so people will get real value for money and see real improvements in standards. The same goes for the savings found in transport, the police, defence and international development; they will be re-spent in those areas, to improve the quality of service that people receive.

Kali Mountford: The hon. Gentleman is extremely gracious and generous in giving way again, but is he not aware that the Gershon review is duplicating a lot of what is recommended by James? Has he not yet realised that money cannot be spent twice, so that money cannot be saved twice? What extra saving that is not a myth can he point to?

George Osborne: I do not think that the hon. Lady was listening to me. We accept the Gershon savingsindeed, we will be significantly better at implementing them than the present Governmentbut we go beyond, with the James savings. In the document that we have produced this weekI am happy to give her a copy if she has not managed to get hold of onewe have listed at least 12 billion of savings additional to those referred to by Gershon.
	I know that we will fight about these decisions as we approach the general election. For example, we will get rid of the new deal, because as the NAO and many independent studies have shown, it does not work. It does not deliver value for taxpayers' money.

Adrian Bailey: Will the hon. Gentleman give way?

George Osborne: I have given way twice to the hon. Gentleman, and I do not think that I shall do so a third time.
	Only a third of people who go through the new deal find sustained employment, and the figure is even lower for those in long-term unemployment. We propose an alternative called Work First, which is partly based on the Australian model, although we have also looked at what happens in Wisconsin. Above all, however, we have examined what happens in the 13 employment zones that already exist in this country. We are modelling our proposals on the existing zones because they are considerably more effective at getting people into work than the new deal. We would thus save a substantial amount on the new deal and we argueindeed, we will provethat our plan will help people who are unemployed to find work.
	The Small Business Service will go. The Prime Minister suddenly became a champion of it half an hour ago, but less than a fifth of small businesses know that the Department of Trade and Industry offers such a service, and fewer than one in 20 uses it. At a cost of 500,000, we do not think that it is giving especially good value for taxpayers' money. Some 168 quangos and public bodies will go.

Mike Hall: rose

George Osborne: I shall give way to my constituency neighbour in a second, but first let me ask him whether he can do without the Government office for London, the Commission for Integrated Transport, the Office of Public Services Reform and the Prime Minister's delivery unit.

Mike Hall: Do the proposals to scrap quangos involve English Partnerships? If so, what will happen to the 30 million that it is giving to stabilise the town centre in Northwich? Is that value for money?

George Osborne: I am pretty sure that English Partnerships is not on the list of 168. [Interruption.] It is not on the list, thenI give myself no let-out clause.

Mark Francois: It is not there.

George Osborne: My hon. Friend helpfully reminds me that it is not on the list. We are only getting rid of things that do not perform an especially useful function. We are merging bodies that can be merged and getting rid of bodies that provide no value for taxpayers' money. It is a good list of 168 bodies, and I am sure that the hon. Member for Weaver Vale (Mr. Hall) would agree that the whole lot could go.
	We will also get rid of 235 bureaucratic posts, although I accept that some of the Labour party's funders will find that controversial. [Hon. Members: Two hundred and thirty-five?] No, 235,000.

Chris Bryant: You said 235.

George Osborne: I am happy to be corrected by the hon. Gentleman. The correct figure is 235,000. No doubt the public service unions that back the Labour party's election campaign will kick up a big fuss about that, but we believe that the posts do not deliver real value for money. However, unlike the Government's proposals, which involve compulsory redundancies, we will set aside almost 6 billion to pay for generous voluntary redundancy programmes for civil servants in posts that will go.
	Regional assemblies and all the apparatus that goes with them will also go. I do not know whether Treasury Ministers noticed that there was a recent referendum in the north-east of England. The people of this country do not want regional assemblies or regional bureaucracy, so it should go.
	We have identified total savings of 12 billion in non-priority areas. The savings will not be made on paper-clips, or through the intangible efficiencies about which the Chancellor talks, but through a reduction in Government activity in areas in which the taxpayer is not getting value for money. The savings can and will be achieved by a conscious act of political will. Of the 12 billion savings, 8 billion will be set aside to fill the structural deficit and 4 billion will be used to give back to taxpayers some of their own money. I know that Labour Members will want to know which taxes on hard-working families we will cut. Let me assure them, especially those defending marginal seats, that those taxes will appear on billboards near them soon.
	One of the most amusing sights of the week was the Labour party's attempt to rubbish the James report. The Secretary of State for Transport, acting in his new role as the Government's chief spokesman on spending, produced with a great flourish 10 things that did not stack up in the James report. He said that we could not possibly merge the Food Standards Agency and the Meat Hygiene Service because they were merged already. We got on the phone to the Food Standards Agency and Meat Hygiene Service and asked the names of their chief executives. One said that he was called Chris Lawson and the other said he was called Dr. John Bell. That sounds like two separate bodies to me, although I know that the Government get confused about such things, because they too have two chief executives.
	The Transport Secretary said that the savings that we aimed to make in the Rural Payments Agency were incredible because they exceeded its entire administrative budget. I suggest to the Chief Secretary to the Treasury that the problem with letting the Transport Secretary do this sort of thing is that he is not up on the detail. He had obviously not read the annual report of the Department for Environment, Food and Rural Affairs, because it says clearly that the agency is spending 188 million on administration, which is a huge amount given what it does. The cost is considerably greater than that which would be expected if the agency was outsourced, and much greater than the 112 million of savings that we set out in our document. I think that the Chief Secretary to the Treasury gave a little nod there, because he agrees that the Transport Secretary is not very good at that job.
	Our spending plans are credible. The Institute for Fiscal Studies says that they add up. They will mean that the country will spend what it can afford and taxpayers will get value for money. We have an answer to the black hole in the public finances. We can make credible savings and protect vital public services. We can fill the deficit and reduce taxes. What is the Government's answer? Which of the options set out by the OECD will they choose: a slowdown in spending, or a rise in taxation? Not the slowdown in spending.

Chris Bryant: Will the hon. Gentleman give way?

George Osborne: I am happy to give way to the hon. Gentleman, because he can let me know whether he would choose to increase taxes or reduce spending.

Chris Bryant: For the avoidance of doubt, I shall answer a question that the hon. Gentleman asked everyone else, but chose not to ask me. I disagree with the Financial Secretary to the Treasury, if he said the words that the hon. Gentleman cited earlier.
	The hon. Gentleman inserted the little phrase protect vital public services in his speech. As far as I am aware, those services include only the NHS and schoolsnot all education. Does that mean that the youth service and special educational needs will be protected?

George Osborne: The hon. Gentleman needs to read the document, which spells out the position on schools, the NHS, international development, the police, pensions, transport and children's social services. The difference between the policies on which the hon. Gentleman and I will campaign during the election is that our plans are published and say how we will fill the black hole. The Government currently give no indication that they will do that, so we will use the debate to try to tease out some answers from the Chief Secretary to the Treasury.

Bernard Jenkin: It is extraordinary for a Labour Member to complain about special educational needs. The Labour Government are forcing the closure of special schools throughout the country, but we would keep them open.

George Osborne: My hon. Friend makes a good point. The education budgetnot just the schools budgetas set out in our plans will increase to 200708.
	It is obvious from the spending review and the pre-Budget report that the Chancellor has no intention of reducing the growth in spending to a sustainable and affordable level, so he will have to increase taxes. Almost every independent commentator is expecting that, and it is what the Chancellor is secretly planning. However, I would be amazed if he did that in the Budget that he will present in a few weeksjust before the coming election. We remember that the Chancellor's only Budget that did not raise taxes was that presentedsurprise, surprisejust before the last general election. After the election, he clobbered everyone with a hike in national insurance. With Labour, of course, the political cycle is more important than the economic cycle.
	We can be sure that taxes will go up in the first Budget after the election if Labour wins. The 8 billion tax question for the Government, which we put to the Chief Secretary today is: which tax will it be? Will it be the 2p on the basic rate of income tax, VAT on food, capital gains tax on main homes, or that old favourite of the Chancellor, a rise in national insurance by removing the upper earnings limit and taking 10 per cent. on incomes over 33,000? According to the Treasury's ready reckoner and the figures that it has produced, all those tax measures would raise about 8 billion. That is 8 billion from hard-pressed families, who, as the Financial Secretary says, have already paid a lot of tax and seen very little in return. I am sorry that the hon. Member for Rhondda (Chris Bryant) broke the cross-party consensus that we had established on that point.

Chris Bryant: Let me tell the hon. Gentleman why I have broken the consensus. In my constituency, I have seen more police officers and more community support officers, I have seen crime being cut, I have seen the schools that used to have leaking roofs and windows being repaired, and I have seen more teachers and more doctors. That is the difference that the money is making.

George Osborne: I am sorry that the hon. Gentleman does not agree with his Treasury Front-Bench colleagues. If he wants to get on in the Labour party, he needs to agree more with the Government.
	All the tax measures that I set out would raise about 8 billion. Does the Chief Secretary rule out 2p on the basic rate of income tax? VAT on foodyes or no? We know that the Treasury has considered capital gains tax on people's homes. Does he rule that out? What about getting rid of the upper earnings limit on national insurance? That would be a 10 per cent. tax on earnings over 33,000. I think that the most likely candidate. Perhaps the Chief Secretary will give us a yes or no. Or are there other stealth taxes that will go up instead: petrol duty, stamp duty, or the stealthy moves with income tax thresholds that we are used to?
	The choice at this election could not be clearer: higher taxes and more waste under Labour, or lower taxes and value for money under the Conservatives. The question that the Chief Secretary must now answer is: which tax will go up?

Paul Boateng: I beg to move, to leave out from House to the end of the Question, and to add instead thereof:
	believes that economic stability is the foundation for continued investment in public services; welcomes therefore the lowest inflation since the 1960s, lowest interest rates for 40 years and the longest period of economic growth for 200 years; further welcomes this Government's record investment in public services; believes that it is important to ensure taxpayer value for money and therefore welcomes the fact that the Government is making efficiency savings to release resources into frontline services; further welcomes the fact that Sir Peter Gershon has identified over 20 billion efficiency savings across the public sector and notes that he said that to go further than the efficiencies he identified would put at risk the delivery of frontline public services; and further believes that any proposal to make cuts in public spending would not only damage frontline public services but the economy as a whole.
	Britain's economic stability has been hard won. As the Prime Minister said only this afternoon, it follows decades of boom and bust, with the price for economic failure being paid by hard-working families in mass unemployment, sky-high mortgage rates and record home repossessions. Nothing must threaten the strength and stability of Britain's economy. Britain is working. We do not intend to allow the Tories to wreck it, and if this motion were to be agreed, you could bet your bottom dollar that they would.

Francis Maude: rose

Paul Boateng: I shall make a few opening remarks, and then I shall be only too happy to give way to the right hon. Gentleman.
	I want to say a few words to the hon. Member for Tatton (Mr. Osborne), the shadow Chief Secretary. I am a great admirer of the hon. Gentleman. In the serried ranks of the Opposition, he is a precocious talent among all those grey locks, and I enjoy his speeches. [Interruption.] He is certainly younger than me, and he may be better looking. [Hon. Members: No!] Yes, I know, it is hard to believe. I have news for the shadow Chief Secretary: it is no defence for economic failure in the recent past to claim that one was in short trousers. It is not good enough to say that one was at school when Britain had double-digit inflation and, as my hon. Friends have said, when Britain had 3 million unemployed not once, but twice. It is not good enough to say that one was at school when we saw unemployment double and the numbers on incapacity benefit treble. That is the record of the hon. Gentleman's party in government, and we do not intend to allow it ever to do that again.

Francis Maude: On that point, does the Chief Secretary agree with Derek Scott that the Labour Government inherited the best economic legacy that any Chancellor has ever had?

Paul Boateng: No, I do not. I say to the right hon. Gentleman, who must, I fear, take some responsibility for this, that when we took office his Government had been paying more to service their debts than they were spending on schools. That is something for which the Conservatives ought to apologise.

Paul Goodman: rose

Paul Boateng: I give way to the hon. Gentleman, who, perhaps, is going to apologise.

Paul Goodman: Speaking of debt, my hon. Friend the Member for Tatton (Mr. Osborne) offered the Chief Secretary a menu of prospective Labour tax rises for him to rule out. Will he now rule out all of them? Indeed, will he rule out any of them?

Paul Boateng: The hon. Gentleman cannot seriously expect me to do that. It would be absurd for a Government to address the issue of tax in a speech by the Chief Secretary in an Opposition half-day debate. The hon. Gentleman is an informed observer of these matters, and he knows well that they are dealt with in a Budget speech or a manifesto. That is how they have always been dealt with, and that, I suspect, is how things will be in the future. Let us have a serious, grown-up debate about these issues.
	Let us look in a little more detail at the James report. We waited a long time for it. First, we heard that it was to be published last August. Then we heard that it might be published last December. Last Monday, we had an announcement.

Several hon. Members: rose

Paul Boateng: I will not give way at the moment.
	What we have not yet had, and I ask for some reassurance on this point now, is sight of the full James report. [Interruption.] I am not talking about this less than salubrious ring-binder. It is not clear who made this folder, but it seems to consist of a number of slides. It seems to be a PowerPoint presentation. All we are asking for is something that goes beyond a PowerPoint presentation and resembles, in its weight, strength of analysis, depth and accuracy, the Independent Review of Public Sector Efficiency by Sir Peter Gershon, but so far we have not had that. I ask my Conservative opposite number when he will publish the James reportnot this PowerPoint presentation but an actual report, with the detailed workings and analysis that underpin it.

David Cameron: rose

Paul Boateng: I shall give way to the hon. Member for Witney (Mr. Cameron), who, I understand, speaks with some authority in the Conservative party. Perhaps he can tell us when the report will actually be published.

David Cameron: The James report has been published in full. Perhaps the Chief Secretary will answer this question: will he confirm that, according to the Government's Red Book, the tax burden in 200809 will be the highest for 20 years? Is that true or not?

Paul Boateng: Once again[Hon. Members: Yes or no?] Hold on. Once again, I reiterate my request for the publication of the James report; then, we can have a serious discussion. The Opposition cannot pretend that a PowerPoint presentation equals a report. Will we see a report? Will we see its workings and its analysis?

David Borrow: Let me take my right hon. Friend back 20 years, when taxation under the then Conservative Government was relatively high. Does he agree that that high taxation coincided with high unemployment? In contrast to that Government, the present Government can afford to spend money on public services, because there are so many people in work and so few claiming benefit.

Paul Boateng: My hon. Friend is absolutely right. The new deal and Jobcentre Plus have proved to be essential in reducing unemployment and keeping it low. The new deal has helped 1 million people into jobs and every day Jobcentre Plus carries out 36,000 work-focused interviews and helps 4,800 people into jobs. No right hon. or hon. Member has not at some time appreciated the role in their constituency of the new deal and Jobcentre Plus. For Conservatives to produce a PowerPoint presentation that offers a 40 per cent. cut in the budget of Jobcentre Plus and to scrap the new deal altogether shows theirs to be a party that would imperil our hard-won economic stability and our success in creating jobs.

Several hon. Members: rose

Paul Boateng: I intend to advance my argument a little further before giving way again; then, I shall give way to the right hon. Member for Charnwood (Mr. Dorrell), a former Secretary of State for Health, followed by my hon. Friend the Member for West Bromwich, West (Mr. Bailey).
	The country would pay a heavy price if the Conservatives put the James report into effect. That price would be paid by hard-working, decent families throughout the land. We make no apology for comparing their record in government with ours. When they last held office, our national debt doubled. Was that value for money? Borrowing hit 50 billion. Was that value for money? Interest rates soared as high as 15 per cent. and millions of families struggled under negative equity. Unemployment was shockingly high, reaching 3 million not once, but twice. All that is the Conservatives' record in government, and whether or not the hon. Member for Tatton was at school during that period, we do intend to allow him or anyone else to forget it.

Stephen Dorrell: Will the Chief Secretary now address himself to the question asked by my hon. Friend the Member for Witney (Mr. Cameron)? Is it not correct to say that the Red Book commits the Government to tax plans that will ensure that by 200809 the tax take will be the highest proportion of national income for 20 years? Is it not therefore unavoidably true that the Government are committed to raising tax?

Paul Boateng: I shall not go down that road[Interruption.]and let me tell hon. Members why. The right hon. Gentleman has been a Treasury Minister and he knows precisely the status of the Red Book. He knows that no Chief Secretary or Financial Secretary, which I recollect he was when we first exchanged views on economic matters, would give undertakings or make comments on tax of the sort that he has sought from me.

Stephen Dorrell: Will the Chief Secretary give way?

Francis Maude: Will the right hon. Gentleman give way?

Paul Boateng: No, I shall not, because I have given way to both right hon. Gentlemen, for whom I have the utmost respect. Let me instead draw the House's attention to figures from the OECDan organisation for which I too have some respect. They are figures to which the hon. Member for Tatton failed to refer in the course of his speech. They demonstrate that in 2002 total UK tax revenue was 35.8 per cent. of GDP, compared with an European Union average of 36.9 per cent. In 11 EU countries, including France, Germany and Italy, total tax revenue as a percentage of GDP was higher than in the UK. For Conservative Members to portray the UK as an over-taxed, high-tax economy flies in the face of the truth.

George Osborne: Will the right hon. Gentleman give way?

Paul Boateng: I shall finish my point before the hon. Gentleman gets up on his feet or, indeed, on a high horsehe has that glint in his eye that suggests that he will be awfully self-righteous. However, he misquoted my hon. Friend the Financial Secretary, who will make that clear himself later, so let me direct the hon. Gentleman's attention to something that certainly is not a misquotethe right hon. Gentleman in question has never denied itfrom The Sunday Mirror, no less, of 31 October 2004. It reads:
	Businesses are reluctant to locate to places where tax rates are too high, regulatory controls are too intrusive and political instability threatens business stability. Places like the UK, the USA, Hong Kong and Singapore attract because their tax rates for business are low.
	That was said by the right hon. Member for Wokingham (Mr. Redwood), who, I believe, sits on the Opposition Front Bench and speaks on regulatory matters. That is the clearest possible endorsement from the right hon. Gentleman of the present Government and their economic policies. We will never allow that economic stability or this country's political stability to be threatened.
	Now, as I promised, I give way to my hon. Friend the Member for West Bromwich, West.

Adrian Bailey: This is a question that I would have preferred to ask the hon. Member for Tatton (Mr. Osborne), but he declined to take it; perhaps my right hon. Friend can shed some light on it. At different times I have heard Opposition spokespersons say that they would use the money from scrapping the new deal, first, to fund their huge pension commitment and, secondly, to cut taxes. Do the Treasury calculations indicate which of those, if either, it could be used for?

Paul Boateng: No briefing that I have from Treasury officials throws any light on Opposition thinking, nor would I ask Treasury officials to divine what the Opposition propose. However, I have reflected on the lack of credibility of the Opposition proposal to spend more while reducing what they call a structural deficit, and simultaneously promising tax cuts. That is incredible, as a number of informed commentators have pointed out.

Edward Leigh: Both parties claim that they can do that by attacking waste. The Chief Secretary asked for some heavyweight analysis. His hon. Friend the Financial Secretary is a member of the Public Accounts Committee. Will he read the scores of reports published during this Parliament that outlined how we can attack waste in the public service, and check his Treasury minutes to see whether every recommendation that we made to deal with waste has been implemented? In the real world we could surely work together to save substantial amounts of public money.

Paul Boateng: Having sat, as my hon. Friend sits, as Financial Secretary on the hon. Gentleman's Committee, may I take the opportunity to pay tribute to the work of the Public Accounts Committee? We in the Treasury and all colleagues across Government take its deliberations seriously, even when not every one of its recommendations is adopted. The Committee does an important job and it would be unwise of any Government to ignore its findings.

Chris Bryant: Does my right hon. Friend agree that one form of waste that we should tackle is not financial, but the personal wasted opportunities represented by the many millions of people who are on incapacity benefit and would like to get into work if they were given the chance? Does he agree that the pathways to work programme that we are advancing, despite being an expensive element of the Budget, is well worth while and is a proper investment for the future?

Paul Boateng: Not entirely surprisingly, I wholeheartedly agree with my hon. Friend. The comprehensive spending review and successive Budgets and pre-Budget reports have recognised the value of the programme.
	Delivering value for the taxpayer depends first and foremost on the economic health and stability of the nation. Our record on that is strong, and we intend to do nothing that would imperil it. That is why I make the comparison that I do with the record of the Conservatives when they had stewardship of the economy.

Stephen Dorrell: rose

Paul Boateng: I will not give way at the moment.
	Our Government's policies are delivering the longest sustained economic growth for 200 years. That is the product not of chance or good fortune, but of the tough decisions for the long term that we have taken since we took office in 1997. The first of those decisions, which the Opposition never had the political courage to implement, was the independence of the Bank of England and our fiscal rules. The Conservatives opposed both. I understand that they have recanted on the former and now support the independence of the Bank of England, while having the bare-faced cheek to lecture us about decisions taken in the phase of the political, as opposed to the economic, cycle, as my hon. Friend the Member for Warrington, South (Helen Southworth) pointed out sotto voce when the hon. Member for Tatton made that bizarre assertion.
	The hon. Gentleman will no doubt tell us that he has always supported the independence of the Bank of England. I fancy that examination of his record shows no such thing. Will he stick to our fiscal rules? I suspect that another general election defeat will be necessary to bring the Opposition round to that conversion.

George Osborne: rose

Paul Boateng: I give way, as long as the hon. Gentleman promises, cub's honour, to answer my question, rather than going off on some frolic of his own, which I fear he is about to do, from the look in his eye.

George Osborne: We have made it clearI am surprised the Chief Secretary did not noticethat we adopt the Government's fiscal rules, but we propose a fiscal projections committee that would be independent of the Treasury. That is supported by the Governor of the Bank of England and the National Audit Office, and I suspect it has some sympathy among Treasury civil servants. I recommend it to the right hon. Gentleman, and I recommended it to the Financial Secretary when we debated it in Committee.

Paul Boateng: I am grateful to the hon. Gentleman. He throws light on at least one aspect of Conservative party policy and I welcome his conversion to our fiscal rules. That makes it more difficult for him to promise increased public spending while promising to address what he describes as the structural deficit and to make tax cuts. We will no doubt explore that further in the course of the debate.
	On the basis of that solid platform of macro-economic stability we are able to deliver historic levels of investment in public services. It has enabled us to focus new resources on priority areas that matter most to honest hard-working familieshospitals and schoolsand across our public services. On health, spending will increase to 92 billion in 200708, compared with 33 billion in the last year of the Conservative Government. That additional spending has already delivered 77,000 more nurses and 19,000 more doctors.
	On education, with which the hon. Gentleman dealt at some length, albeit with too little accuracy, spending will be 12 billion higher in 200708 than in 200405. We have already delivered 28,500 more teachers since 1997. I shall address in detail some of the assertions made by the hon. Gentleman when he suggested that that was not money well spent and questioned the productivity of our education policies.

Stephen Dorrell: rose

Paul Boateng: Before I come to healthwhere the right hon. Gentleman, the former Secretary of State for Health, may be able to throw some light on our deliberationslet us consider what has been achieved in education. Between 1997 and 2004, the percentage of 11-year-olds achieving expected standards in literacy and numeracy rose from 63 per cent. to 78 per cent. in English and from 62 per cent. to 74 per cent. in maths. That fell slightly short of what were stretching and demanding targets of 85 per cent. and 75 per cent. respectively, but it is an improvement on the time when the Conservatives had the stewardship of the education systema dramatic improvement, as one of my hon. Friends says. The proportion of 16-year-olds achieving five or more GCSEs rose from 45.1 per cent. in 1997 to 53.7 per cent. in the last year for which we have figures. Conservative Members should not decry that; we should be thanking teachers, parents, local education authorities and the Government for that. It is the partnership between all of those that has resulted in real improvement in the life chances and opportunities available to our young people. All of that would be put at risk were the Conservative party ever to have stewardship of the economy.

Stephen Dorrell: I am grateful to the Chief Secretary for giving way again. I should like to take him back to the argument that we were having in answer to the question posed by my hon. Friend the Member for Witney (Mr. Cameron). The right hon. Gentleman gave an interesting reply when I asked him to confirm that the Government's own Red Book set out plans for an increase in the percentage of national income accounted for in tax. He said that it did not matter, because our percentage taken by tax is below the levels of other European countries. Is it therefore the Government's policy to raise the tax burden until it is in line with that of other European countries? Would it not be a more intelligent tax policy for the Government to recognise that a relatively low tax burden, compared with that of other European countries, is an important source of competitive advantage for the British economy, the safeguarding of which should be a high priority for the Government?

Paul Boateng: As the right hon. Gentleman knows, we have consistently argued within the European Council for tax competition rather than tax harmonisation. That is now and has always been our policy. But I am interested in his foray into tax policy, because if we are talking about tax, and the Conservative party seems anxious to do so, reference should be made, as it always is, to the dividend tax credit on pension funds. I can remember when the right hon. Gentleman was Financial Secretary, and I think that it was then, when the Tories cut rates of dividend tax credit on pension funds and advance corporation tax in 1993 from 25 per cent. to 20 per cent., that the right hon. Gentleman, to no less a journal than The Guardian, said:
	The change was made to give a cash boost to British industry in the short term, and to raise Government revenue in the medium term. Clearly to do that, the money has to come from somewhere.
	That is why I urge the right hon. Gentleman to reflect a little on precisely what is proposed by his own Front-Bench spokesmen when they lay out their tax options, because I think that he will find, applying the rigour and scrutiny that he no doubt acquired when he was Financial Secretary, that the sums of his right hon. and hon. Friends simply do not add up.

Geraint Davies: Does my right hon. Friend accept that what is important with regard to the point made by the hon. Member for Witney (Mr. Cameron) is not the share of GDP that is taxed, but the share that is taxed as borrowing, in the light of the fact that borrowing is deferred tax that has to be paid? Will he accept that the previous Conservative Government, rather than increasing tax 66 times, massively increased the amount of borrowing and therefore the future liabilities of future generations, while this Government have massively reduced borrowing and increased investment by putting into jobs 2 million people who are paying tax rather than drawing dole; and the debt payments are lower because interest rates are lower as well?

Paul Boateng: My hon. Friend makes an important point. The Leader of the Opposition, I think addressing last year's Conservative party conference, said:
	In 1992 we promised to cut taxes year on year. But we put them up.
	That was a moment of candour from the right hon. and learned Gentleman, and that was breaking out all over the place, because at the same party conference, the shadow Chancellor said:
	The sad truth is when we were in office, we made promises on tax we couldn't keep.
	The truth of the matter is that the Conservative party's sums do not add up, yet they continue to raise the promise of tax cuts. We know what value to put on those promises. This was the party, after all, that invented the poll tax, and if ever there was waste and bureaucracy it was in that tax, and this was the party that put VAT on fuel.

Rob Marris: rose

Paul Boateng: I have allowed a number of interventions on both sides and I owe it to other hon. Members who are keen to speak to continue to make my speech.
	We take the issue of efficiency seriously. That is why we have set out clear plans based on detailed and rigorous evidence that will deliver at least 20 billion worth of efficiency gains by 200708money that will be reinvested in the front line to support essential public services, such as schools, hospitals and the police. That is value for moneybetter outcomes; investment in front-line services; savings at the centre, including a gross reduction of more than 80,000 civil service posts and a relocation of 20,000 public sector posts away from London and the south-east. We are making progress in delivering those efficiency gains to free up resources to recycle them into front-line priorities. Across government, 2 billion has been saved through better procurement, deals and use of e-auctions. The Department of Health has negotiated savings on medicines that will free up some 1 billion a year for the NHS, again for use on the front line from 200506. The Department for Transport will deliver savings of around 140 million in 200405 as result of improved Highways Agency contracting and other measures. Crucially, the Ministry of Defence will deliver over 400 million in savings through improved defence logistics.
	What we have not heardit may be that we will get a clearer take on this when the James report is published, not in the form of a slide presentation in a battered folder but[Interruption.] I hear protests that it is brand new. Well, some savings should be made there. The hon. Member for Tatton should recycle his own folders rather than lecturing us about chairs.

Andrew Turner: Will the right hon. Gentleman give way?

Paul Boateng: Not at the moment. I just want to finish the point about waste and the Conservative party's policy on it, because the hon. Member for Tatton uttered a calumny against the Ministry of Defence, suggesting that money had been spent on chairs that cost 1,000. That is typical of the Conservative party and its approach to waste. If the hon. Member for Tatton can show me a chair that cost the Ministry of Defence 1,000

George Osborne: You will attempt to eat it.

Paul Boateng: I will do more than attempt to eat it. A number of Conservative Front Benchers have been obliged to face up to the fact that they may have to eat their hats or humble piethey are more likely to eat hats than they are to eat humble pie. If the hon. Gentleman can identify the chair in the real world, rather than in the fevered imagination of those in Conservative party central office, on the day many years hence20 or 30 years' timewhen he eventually achieves ministerial office, I will buy him a chair for that office. [Interruption.] That is the extent of my offer. [Interruption.] Give, give, givethat is what I am noted for. There is no such chair; it does not exist.
	I shall go into detail about the chair, because Conservative Members keep raising the matter. Interestingly, a number of public sector organisations use the Herman Miller aeron chair. The standard fee paid by the public sector for that chair is apparently 320. There is no such thing as a 1,000 chair in the MOD. If we are to have a serious debate about waste, Conservative Members could at least do us the service of debating serious matters rather than debating a 1,000 chair. In a moment of candour, the hon. Member for Tatton, who is full of candour, would admit that there is no such thing as a 1,000 chair.
	I shall give way to the hon. Member for Isle of Wight (Mr. Turner), who will, I hope, make a serious point about waste.

Andrew Turner: The Chief Secretary may be surprised, but the figures that he presented earlier on the improvement in GCSE results, which are quoted in the Select Committee report, were achieved at the expense of a 31.6 per cent. increase in public expenditure. Over an equivalent five-year period from 1990 to 1995, a greater improvement in results was achieved with an 11.4 per cent. increase in Government expenditure. I know that the Gershon report proposes reductions of 4.2 billion in Government expenditure on education, of which only 1.2 billion will be found in the Department for Education and Skills. Will the remainder of that money come from the front line, including schools and universities?

Paul Boateng: That is a serious and interesting point. How can one find adequate measures of productivity in a field such as education? The Atkinson review was conducted to help us in that matter. The hon. Gentleman takes an interest in such matters and knows that it is absurd to suggest that more teachers somehow reduce the productivity of the education system. I am sure that he agrees that that does not make sense. We must work out how to measure productivity in education more accurately.
	I am sure that the hon. Gentleman also agrees that local education authorities could undoubtedly make savings through better purchasing and better logistics. Education authorities and schools can make such savings, and we must have a serious debate about how such savings may be identified. I am glad that the hon. Gentleman welcomes Sir Peter Gershon's approach.
	That is a more serious point than the assertion by the hon. Member for Tatton that savings that might be obtained by abolishing regional chambers. To suggest that one can scrap regional planning for jobs, housing and transport without paying a price is disingenuous, and it is not a serious point. However, he does not have to take my word for it, which he can dismiss as partisan by suggesting, He would say that, wouldn't he? This morning, I attended the central local partnership group, and he should talk to some of his Conservative colleagues in local government.
	The hon. Member for Tatton dismissed regional assemblies, which is surprising given the good work that they do, but he does not have to take my word for it. He drew the attention of the Treasury team to the vote in the north-east, of which we are well aware, and I shall draw his attention to the words of Councillor Sue Sida-Lockett, who is clearly well knownand much loved, I am surein Conservative circles:
	Despite the north-east vote, there will still be a requirement for effective regional planning functions, provision of democratic mandate for the regions and effective scrutiny of other regional bodiesa role in which the assembly and other voluntary chambers have shown themselves to be extremely competent.
	That is an endorsement from no less a person than Councillor Sue Sida-Lockett, who, I fear, is about to be rubbished or undermined in some way by the hon. Member for Rayleigh (Mr. Francois)I hope that he does neither of those two things.

Mark Francois: I will do neither of those two things, actually. Is the Chief Secretary aware that the East of England regional assembly, which that lady chairs, produced a regional planning plan in November 2004 to build 428,000 houses in the east of England? One month later, the same regional assembly effectively abrogated its own plan because of the lack of transport infrastructure provided by the Government. If that is successful regional planning, do we really need it?

Paul Boateng: The hon. Gentleman must take up that point with Councillor Sida-Lockett, and I am sure that he is in a position to do so.
	We have not heard a serious response from the Conservative party on the implications for housing if the 1 billion of cuts recommended by the James report were implemented. The hon. Member for Tatton knows that such cuts would mean the scrapping of the sustainable communities plan and that many thousands of first-time buyers would be deprived of the opportunity of owning their own homes. Our efficiency savings at the centre are recycled to front-line services, as opposed to the reckless cuts in public services, of which I have given a number of examples this afternoon, proposed by the Conservative party.
	It would be disastrous if the Conservative party were to have its way: our economy would return to boom and bust because the sums do not add up and our infrastructure would be neglected across the board, including areas such as transport, skills and health. When the Conservative party last had stewardship of the economy, it failed to invest in those areas. The contrast is between investment and cuts. We maintain stability and ensure that we keep to our fiscal rules, and stability means that we can invest in the skills of all our people. We are building a platform from which there can be record levels of growth, and maintaining the lowest interest rates for 40 years and the longest period of economic growth for 200 years. It is that combination of low inflation, low unemployment and rising living standards that this party and this Government are determined to uphold.

Rob Marris: Does my right hon. Friend agree that one significant cut in waste by this Government is that of the waste of many people's lives when they are unemployed? The proportion of gross domestic product that is spent on unemployment benefits and interest on the national debt has been cut from the 1997 figure of 4.5 per cent. to the current 2.6 per cent. That represents a considerable increase in efficiency. The latest Organisation for Economic Co-operation and Development figures, which were not quoted by the hon. Member for Tatton for obvious reasons, show that in the United Kingdom we have the highest gross national income per capita in the European Union, apart from Luxembourg.

Paul Boateng: My hon. Friend is right to draw the House's attention to those facts. Labour Members will not take any lessons about waste from the party that doubled unemployment, which hit 3 million not once but twice. There is no greater waste, not only in terms of borrowing to fund benefits, which happened under the last Conservative Government, but of the wasted potential and lives that unemployment represents. That is of great concern to us, but it has never been so to the Conservatives. That is apparent from their cavalier approach to the budget of the Department of Trade and Industry and from what the hon. Member for Tatton said about the Small Business Service, which will be noted by the Federation of Small Businesses as it has been noted by the CBI. That is the same cavalier attitude that led to 1,000 businesses going bust every week between 1992 and 1996.
	We must not forget, and we do not intend to allow the people of this country to forget, the true waste that characterised the Conservatives when they had stewardship of the economy. Our record speaks for itselfeconomic stability, strong support for the front line, efficient public services, and true value for money. That contrasts well with the flaky facts and empty promises of the Conservatives. For that reason, I urge my right hon. and hon. Friends to go into the Lobby with us tonight to vote against the motion and for my right hon. Friend's amendment.

David Laws: As ever, I enjoyed the Chief Secretary's speech, although it could perhaps have done with a few judicious cuts of its own. I hope that that chair in the Ministry of Defence is never found, because if it is, he will owe the hon. Member for Tatton (Mr. Osborne) more than a pint.
	I welcome the fact that the Conservatives have given us not only an opportunity to debate the Government's strategy on public services and delivering value for money, but an early opportunity to discuss some of the material released in the James report earlier this week.
	The Chief Secretary is usually a fair, calm and dispassionate man, as I am sure that he himself would acknowledge, and he was a little unfair to criticise the Conservatives on the extent of the information that they have published so far. I remind him of the caution that his own Treasury team and the Chancellor of the Exchequer showed before 1997, when nowhere near as much information was provided. Indeed, the right hon. and learned Member for Rushcliffe (Mr. Clarke), who does not always support his Front Benchers on all matters, is quoted today as saying that
	the Conservatives unveiled the most detailed proposals for tax and spending ever produced by an opposition party.
	Certainly, they are considerably more detailed than those set out by the Conservatives before they got into power in 1979 or the Labour party before it got into power in 1997. There seems to be an inverse relationship between the amount of information that parties publish when they are in opposition and their proximity to power. If my theory is right, and if the comment by the right hon. and learned Member for Rushcliffe is accurate, the Conservatives may be very far away from getting back into powerperhaps as far away as at any time in their recent history.

David Borrow: The hon. Gentleman suggests that the amount of detail in the Conservatives' proposals reveals their distance from power. Does he think that the same applies to his own party, whose proposals are truly incredible?

David Laws: I think that we are getting closer to power and the Conservatives are getting further away from it, so the relative movement is extremely favourable.
	I am sure, Mr. Deputy Speaker, that you want me to turn to the motion and its assessment of the problems that the country faces and possible solutions. It refers to
	the path of more waste and higher taxes.
	Every party, including mine, has had its own review of public expenditure. It is important that we have this debate and that all parties engage in it, because it is inconceivable that an organisation with a budget the size of the Government's, with 550 billion of public expenditure, will not have various areas where savings can be made. However, it is pity that neither the motion nor the speech by the hon. Member for Tatton made more acknowledgement of the need for an increase in public expenditure not after 1997, but after 1999 when the Conservative spending plans came to an end. What is missing in all the discussion of waste and higher taxes is any acknowledgement of the important role of public expenditure in improving our infrastructure and securing improvements in public services, where there were major inherited problems following the 18 years of Conservative Government.
	I understand that today the Conservatives signed up to the Government's commitments in respect of overseas development assistance. That is very welcome, and it reminds us that public expenditure is not simply a matter of waste and taxation but of achieving very important objectives. However, I remind the hon. Member for Tatton that when the Conservatives were in power, as opposed to matching commitments in opposition, real expenditure on overseas development assistance to Africa fell by about one third between 199293 and the end of that Parliament. I hope that the Conservatives have reviewed their approach to issues such as public sector investment and overseas development expenditure, but that is not evident in the motion or from the remarks of the hon. Member for Tatton.
	I want to turn to issues relating to value for money and explore them in the context of the James report, which is extremely helpful and detailed. We should all be concerned about securing value for money. It is clear that the public's appetite for additional increases in taxation is limited, as people want to see delivery in exchange for the additional taxes that they have paid. We have many concerns about the Government's performance in that respect, not least because of their excessive control over public expenditure and centralised control of targets, which is often extremely wasteful. We should prefer a considerably greater devolution of power. We share some of the concerns expressed by the hon. Member for Tatton about productivity in the public sector and the fact that it is falling behind that of other countries in relation to the private and public sectors, although it is important to bear it in mind that many of the additional investments in public expenditure since 1999 have been in areas where one would not expect any evident improvement in productivity.
	I shall give an example from my constituency, where the ceiling of a hospital fell down six months ago. The hospital was built before the second world war, which predates the national health service, and sticking plaster wasalmost literallyapplied over the past couple of decades to keep the building together. That solution failed to the extent that the hospital has almost fallen down, but it will be rebuilt. That will not necessarily appear in the productivity data on public expenditure but it is nevertheless a worthwhile investment.
	The hon. Member for Tatton put taxation centre stage in his speech. The motion states that there have been 66 tax rises since Labour came to power. That is not a helpful way in which to consider taxation because, as was said earlier, one needs to examine the net balance between tax increases and tax cuts. In addition, as the motion states, there is a need to consider the rate of change of taxation. The motion calls for
	a change of direction away from the path of . . . higher taxes.
	The right hon. Member for Charnwood (Mr. Dorrell), who is not in his place, raised that issue a couple of times and invited the Chief Secretary to comment on the fact that the Government's public expenditure and taxation documents suggest that the tax burden will increase in the next few years. However, the right hon. Gentleman did not appear to realise that his intervention constituted something of a boomerang for his Front Bench, which is signed up to the same plans, minus a small, moderate reduction in taxation of 4 billion.
	This morning, the Institute for Fiscal Studies said that the proposed Conservative tax cuts would offset only about one seventh of the increase in the tax burden as a share of national income that the Treasury has pencilled in for the next five years. In other words, the Red Book shows that the tax burden will rise from 36.2 per cent. of national income in 200405 to 38.4 per cent. in 200910. The hon. Member for Tatton, who is normally candid in his responses, ducked my question. I asked him to acknowledge that, even after the 4 billion of tax cuts that he intends to implement, the tax burden would increase substantially. Indeed, it will rise from 36.2 per cent. to 38 per cent. of GDP. The tax burden under Conservative plans for the next Parliament will therefore increase by 1.8 per cent. If I am wrong, I would be happy for the hon. Gentleman to intervene. However, I take his silence to show that the Conservative party is signed up in its expenditure and taxation plans to an increase in the tax burden in the next Parliament.

Francis Maude: By how much would the tax burden rise if Liberal Democrat plans were effected?

David Laws: The right hon. Gentleman knows that we set out clearly our plans for the abolition of the council tax, which is a most unfair tax, and its replacement with local income tax. Our only taxation proposal is for the 50 per cent. upper rate of tax, which would abolish tuition fees and reduce the burden of council tax. However, that does not answer the question that I posed to the hon. Member for Tatton. I take Conservative Members' silence as an acknowledgement of what they would perhaps prefer not to admit: if the Conservative party won the election, the tax burden would increase by almost 2 per cent. of GDP under its current plans.

Francis Maude: The hon. Gentleman is an intelligent and fair man. He asks my hon. Friend the Member for Tatton (Mr. Osborne) to answer a specific question about the Conservative party's plans. Surely he must acknowledge that, if he wants an answer, he must answer the same question about Liberal Democrat plans.

David Laws: My party does not make the same claim as the Conservative party to reduce taxes. The Conservative party is trying to give the impression that if it came to power in the general election that will be held in a couple of months, the tax burden would reduce. The truth about Conservative expenditure and tax plans is that the tax burden would increase considerably, and that is why Conservative Front Benchers do not want to intervene on me.

Stephen McCabe: The hon. Gentleman said that the Liberal Democrats proposed a 50 per cent. top rate of tax. He may know that his party leader said 51 per cent. the other day. I do not know whether that is mission creep. When we combine their top rate of tax of 50 per cent. or 51 per cent. and local income tax, what will be the tax burden on the average hard-working family?

David Laws: The hon. Gentleman will be delighted to know that, under our proposals to abolish council tax and replace it with local income tax, 70 per cent. of households will be better off or no worse off. He should talk to those of his constituents who are retired or on a low income and who often pay 10 per cent. of their income in council taxa grossly unfair tax that his party should be ashamed not only to retain but to have increased by 80 per cent. since 1997.
	I should like to consider some of the public expenditure issues that have been raised in the context of the James debate because they are important. The Conservative party should be congratulated on stimulating debate by publicising all its policies on its website. The Chief Secretary was ungenerous in not giving the Conservative party some credit for the huge bulk of papers that he can have printed off if he is not good with technology. I had a chance to read through them this morning. I also welcome the fact that the Conservative party has undertaken a review of public expenditure. In any organisation, it is always possible to find some efficiency savings and to reprioritise some expenditure. However, it is also tempting for politicians who are desperate for easy and painless solutions to claim that they can find huge amounts of something called waste that can square the circle between public expenditure and tax priorities. We need to consider whether the Conservative party has successfully squared that circle.
	Let us begin by examining the total savingsthe 35 billionthat the James report claims to have found. It sounds immensely impressive and a large amount of money. The small print acknowledges that the Government have already said that they will make two thirds of those savings22 billionand use them internally to improve public services. There is a question about whether the Government will deliver them, but the additional savings that the Conservative party says that it can make are not 35 billion but the much lower figure of 13 billion.

David Borrow: The hon. Gentleman mentioned parties looking for painless ways of making savings. His party proposes abolishing the Department of Trade and Industry. Which of the Department's functions would be retained and where would they be placed in the Government structure?

David Laws: I am delighted to give the hon. Gentleman more information about our plans for the Department of Trade and Industry. He may know that, since the Government came to power, there has been a huge increase in the Department's budget. He will also know about reports by the Public Accounts Committee and others about the way in which money has been spent and the fact that many of the industrial subsidies that the Department pays are wasteful and have low economic returns. We would especially target that. Of course, some of the Department's expenditure would remain as part of total Government expenditure, especially some parts of the longer-term science budget, which is important.
	Let me deal with other parts of the James report. It includes a list of 168 public bodies that will be abolished. That is clearly set out, and I do not want to be unfair to the hon. Member for Tatton about his list. However, I note some double and triple counting, a practice for which the Conservative party criticises the Labour party. First, there is the double counting of the Gershon savings as both the Government's proposals and those of the Conservative party. Of the 168 bodies, 16one tenthare regional agricultural wages committees, 28 are individual health authorities, nine are Sport England regional bodies, and seven are regional industrial development boards. So, four entities account for 60 of the public bodies in questionmore than a third of the total.
	The Conservatives have also been very clear about their proposed reductions in jobs. They would apparently make a reduction of 235,000 public sector jobs, or bureaucratic posts, as the James report describes them. That is quite a large reduction. Apparently, however, not one of those posts would be eliminated through compulsory redundancy. I find that difficult to believe, and I wonder whether Mr. James thought that that was a credible proposal.
	I assume that most of the bureaucratic public sector jobs are going to come out of civil service staffing figures, rather than individual public services themselves. If that is the case, we are talking about a reduction of about 550,000 public sector jobs, as a base figure. It is true that, under the Conservative Government between 1992 and 1997, the head count in that category was reduced by about 90,000. It is also true that that category has increased since Labour came to power. If I am right, the implication of the Conservatives' figures is that the permanent staff head count would fall to about 410,000 from a peak 10 years ago of about 580,000. That would be almost 100,000 lower even than the head count at the end of the last Conservative period in office. That is an incredible, and potentially questionable, set of figures. It is as questionable as the idea that all those reductions could be achieved through voluntary redundancy. I notice that the Conservatives' largest spending commitment in any one year is a 5.9 billion commitment to fund voluntary redundancies. That says something about the views of the party.

Geraint Davies: Will the Liberal spokesperson make clear what the Liberal position is on the Gershon report? Would the Liberals cut that total number of jobs, or just some of them? What would be the head count under the Liberal Democrats? Secondly, can he confirm that the introduction of a local income tax would increase the aggregate amount of tax being paid in Britain?

David Laws: The answer to the hon. Gentleman's second question is no. The abolition of council tax and its replacement with a local income tax is an entirely neutral exercise. It would not increase the total tax burden. On the Gershon report, my hon. Friend the Member for Twickenham (Dr. Cable) has already made it clear that we are committed to delivering those savings.
	That brings me to my next point. There is triple counting and a lot of smoke and mirrors in the other parts of the James report, and similarly, when we look at the small print relating to the 235,000 reduction in jobs, we find that it includes the 80,000 reduction that the Government are already implementing, and that 91,000 of the 235,000 jobs would simply be reclassified from the public sector to the private sector. They would therefore not be cuts at all. The figure for the Conservatives' proposed job cuts on top of those implemented under Gershon would be 64,000, not 235,000.
	We need to consider in a little more detail the savings that the Conservatives are proposing. There are some with which we have no problem. The Conservatives have identified cuts to be made in some of the industrial subsidies, and cuts in some parts of the Department for Environment, Food and Rural Affairs and the Office of the Deputy Prime Minister. We think that those would be entirely sensible. The Conservatives have also proposed a set of quite small changes with which we may not agree but which are defensible in their own right in terms of costing. We may not agree with their plans to scrap the regional assemblies and the supreme court, for example, but they are perfectly entitled to those policies and to put them into their costings.
	The Conservatives' remaining savings proposals seem to fall into two categories. First, there are savings that are credible but frankly unattractive. Then there are savings that sound attractive but are, in reality, incredible. I shall give the House an example. The extent of the Conservatives' proposed cuts to the new deal, to the social housing budget and to Jobcentre Plus would harm some of the most vulnerable people in Britain. My hon. Friend the Member for Twickenham had an interesting exchange with the hon. Member for Havant (Mr. Willetts) on the BBC yesterday, in which he pressed the Conservative spokesman on the implications of privatising the whole of Jobcentre Plus and significantly reducing expenditure in that area. My hon. Friend asked his Conservative counterpart how the Jobcentre Plus function of giving advice on work and benefits would be continued, following privatisation and given the scale of the proposed cuts. He was told that those functions would have to be outsourced to voluntary bodies. It is extraordinary to suggest that we should simply sweep away the employment and benefit advice service for some of the poorest people in society and let the voluntary sector take care of it.
	I am worried not only about the proposed cuts that would hit those on lower incomes, but about those that I doubt would deliver value for money. There is a good deal of over-regulation in much of society today, and the Government have worsened a lot of that. However, I question whether it would be sensible to abolish the whole local government inspection service and to rely on council auditors and customer satisfaction reports from people who live in a particular area as a means of finding out what is going on in a council. I find it extremely surprising that that proposal should come from the Conservatives, as they were determined to introduce more inspection and accountability in the public sector. An example of that would be their proposals relating to Ofsted, which were bitterly opposed for a while.
	We are very doubtful about those Conservative proposals. The costings are perfectly legitimate but the effects would be undesirable. There is, however, a bigger hole in the James report, which we look forward to exploring further in the next few weeks. It relates to the credibility of the savings that appear attractive because they do not involve cuts in key services. I have looked at the figures for reductions in Ofsted, which are already being implemented by the Government. I have also examined the proposed reductions in the advertising and consultancy budget, and I believe that the figures used in the James report are wrong. Claims are also being made in relation to the 30-month scheme and absenteeism, and 3.2 billion of completely unspecified savings are proposed by taking out the Gershon savings from Departments that could otherwise recycle them. The proposals also claim that extraordinary savings could be made by the Treasury in the processing of Inland Revenue payments, on the basis of figures in the James report that look like a back-of-the-envelope calculation. In my view, all those proposed savings are bogus and flaky. Looking at the total of the real savings that are being claimed in the James report13.3 billion, not 35 billiona crude analysis would suggest that half those savings relating to waste were bogus and undeliverable.
	Of course, we do not have to rely only on the Liberal Democrats' analysis to draw that conclusion. The hon. Member for Wantage (Mr. Jackson) spoke about the sceptical majority of the British public this weekend. He said:
	If you are going to cut taxes . . . there are only two ways you can go. You can either say we are going to cut taxes and we are going to do less, or you can say we are going to cut out a whole lot of waste. Cutting waste is what you say when you are not brave enough to say we are going to do less. They
	those on Conservative Front Bench
	talk about 40 billion of waste. I don't believe it. The waste thing is a fig leaf which is used to avoid talking about the practical implications of cutting taxes and spending.
	The hon. Member for Wantage may no longer speak for the Conservatives, but I suspect that on this issue he speaks for the vast majority of sceptical individuals in this country who have become used to having been told by Governments and Oppositions for 100 years or more that all their problems could be solved by cutting out waste. That sceptical majority will not be convinced by the claims being made by the Conservatives.
	The Conservatives claim that they will cut taxes, but when we probe further, we discover that under the next Conservative Administrationhowever unlikely that prospect may bethe tax burden would rise by almost 2 per cent. of gross domestic product. The Conservatives say that they will cut waste, yet most of their proposals involve double counting and incredible claims. On public spending, where Conservative proposals are attractive, they are incredible, and where they are credible, they are, to us, deeply unattractive.
	Mr. James, the company doctor, was supposed to deliver a cure for Conservative electoral ills. Instead, I fear that he has turned out to be a retailer of what Mr. Gladstone would surely have referred to as quack remedies. Mr. James is supposed to have a reputation for saving beleaguered enterprises, but he appears to have failed to save the Conservative party not only from intellectual bankruptcy but from electoral defeat.

David Borrow: Eight years ago, in the run-up to the 1997 election, I was asked on the doorstep what Labour's plans were for tax and spending. The party's promises at that time were very specific, and they were of the sort that one could fit on an A4 piece of paper. The promises were very specific and narrow because the Labour party believed that it would become the Government. It did not come out with a document containing pages and pages of detailed savings that it felt it could make when in government, because until one is in government, one is not in a position to say that savings can be made. One cannot do that until one has had a detailed look at the books.
	The Labour party was right to be cautious at that time. It identified ways in which savings could be made and in which the tax burden could change. The key ingredient of that was having measures in place to reduce unemployment, principally the new deal, for which the Labour party had identified a pot of money. As a result of the new deal and continued economic growth, 2 million new jobs have been created in the past eight years. The amount of taxpayers' money that was being wasted on unemployment has plummeted. In addition, the amount of tax revenue coming into the Treasury because 2 million more people are in work has gone up. That has allowed the Labour Government, at this point in time, to begin to identify other savings, which can then be used in front-line services.
	In many ways, the Gershon report's conclusion that we could make savings of 21 billion, which would involve a reduction in public sector jobs of 70,000, was challenging. Achieving that will be a huge task. I hope that my Front-Bench colleagues have their figures right and have done the necessary work, but I know that delivering that in the next term of a Labour Government will be immensely difficult and will create considerable pain. The bulk of the 21 billion savings is to come not from reductions in the number of public servants, but from better private sector procurement. From speaking to companies in my constituency, I know that they are beginning to feel the pinch when it comes to dealings and negotiations with central Government.
	I therefore find it difficult to read reports this week that the Conservative party in opposition can suddenly find not 21 billion of savings, but 35 billion, and that it can pretend that that will be painless and that extra cuts in public sector jobs, whether 64,000 or 160,000, will make no real difference. It is bound to make a difference. When public sector workers in my constituency come to me with their concerns about the Government's proposed cuts and savings, I need to be assured by Ministers that if the numbers of people working for the Government will be reduced, whether in the Department for Work and Pensions or wherever, that will not mean a reduction in the service given to my constituents. It is not right that the taxpayer should pay to employ people to do unnecessary jobs. However, if people are working for the public sector doing necessary and good jobs, if we decide to get rid of those jobs we must be honest and open about the effect on services. If, as a result of investment in IT, certain jobs can be done more efficiently, that is a step forward. If certain jobs do not need to be done because we do not have large numbers of people unemployed, that is good and that money can be spent elsewhere. We need to be open and honest about all that.
	What concerns my constituents most when it comes to tax and spending is whether they can afford to pay and whether they are getting decent services for the money that they pay. After eight years of a Labour Government, we have steady economic growth, the lowest interest and mortgage rates for 30 years and more, and unemployment in my constituency now at 1.2 per cent. which is a huge contrast to the situation 10 or 15 years ago. With that economic stability, steady economic growth and low unemployment, people in my constituency can decide whether they can afford to pay a bit more tax, or whether they want to pay a bit less, in relation to the quality of public services that they receive.
	I had a couple of meetings recently with the Lancashire police authority, which has been carrying out consultation exercises over the past few years, on whether the people of Lancashire would be prepared to pay above-inflation increases in council tax to the police authority if they got better services. All the indications are that if the police authority were to increase the council tax element for the police by 10 per cent. or so, and if that led to more front-line police officers, people would be willing to pay for that. If they believe that they are getting a better service, they are prepared to pay for it. If they do not think that they are getting a better service, they are reluctant to pay for it. Therefore, when we talk about investment in public services the key question that people must ask themselves is: are we getting value for money? Is it right for us to continue to pay through taxes rather than buying privately?
	Over the past eight years, I have visited schools in my constituency on a regular basis. Every one of them has had major investment in staff and equipment, and virtually every one has new building projects under way. This Friday, I shall go to the opening of a 1 million-plus sports hall at Tarleton high school. The same school had a new 500,000 block built three or four years, with computer suites and so on. That is typical of the schools in my constituency. Parents in my constituency can therefore see from the schools to which their children go that extra investment in education is leading to visible improvements. There may be a question as to whether that investment has led to the sort of improvements in performance that some of us would like, but when I remember what many of those schools were like eight years ago, I defend the need for this Labour Government to put in major capital investment. If a school has inadequate buildings, with leaking roofs, bad windows and inadequate areas for sport and assembly, spending a lot of money on improving that may not automatically lead to better GCSE or key stage 2 results. In a prosperous, wealthy society, however, I would have thought that all Members would agree that it is important to spend that money, and I can certainly say to my constituents that it is money well spent.
	The same applies to the health service in my area. We have had dialysis units and cancer units. The doctors' surgery across the road from my office in Leyland seems to have had extensions and improvements every few years as it has expanded and delivered extra services. A new drug and alcohol abuse centre was opened in my constituency a few months ago, which we have all been wanting for many years. Those are tangible, visible improvements in public services, and people can make a judgment on whether it is right to pay for them.
	I agree with those who have said today that we may have reached more or less the limit of what most people want to pay as a proportion of the overall level of tax. As sensitive Members of Parliament

Mark Hoban: Will the hon. Gentleman explain how he would fill the Government's 8 billion black holethe gap between their spending plans and their taxation?

David Borrow: I am sure that as the years unfold we will see whether it is a fictitious or a real black hole. During every year that I have been in the House, I seem to remember hearing Opposition Members talk of doom and gloom, saying that there would be a recession, that there would not be the expected tax revenues, that expenditure would be higher than expected and that the Chancellor would be unable to balance his books. Every year those critics have been dumbfounded by the fact that the Chancellor has been right and they have been wrong. If the Chancellor continues what he has been doing over the last few years, I have no reason to believe that he will not be able to deliver the public sector investments and improvements that I want to see, as well as ensuring that the books balance over the economic cycle.
	I want to say a little about why some of the investment that the Opposition parties want to get rid of is, in fact, crucial. That applies in particular to the new deal. Members may ask why the new deal is important to a constituency like South Ribble, which has full employment. Two or three years ago, Tesco built a new store in Leyland and we were able to persuade it to become part of a new deal partnership. It recruited many of its employees from the long-term unemployed register. Using new deal money, it put them through a detailed programme to prepare them for work. People who had not worked for many years, and in some cases had not worked at all, eventually found secure, stable jobs with Tesco. Without the new deal, that would not have happened.
	Employers often say to megiven that my constituency has full employmentthat there are people out there without jobs, but they do not have the skills and the confidence to obtain work. Hundreds of workers in my constituency have been brought in from overseasfrom eastern Europe and South Africa, for instanceand are doing excellent work, particularly in horticulture. However, I know that there are probably similar numbers in my constituency who, if we as a society were prepared to invest in them and give them confidence, skills and the work ethic, could be doing those jobs and making a productive input.
	That will not be cheap. In the years ahead, the new deal programme may have to be altered to meet the needs of the future. I have no doubt, however, that if we want to make a difference to society, securing employment for people who, in many ways, are seen as being unemployable will be crucial. Breaking the cycle for people who have never worked and whose parents often do not work is one of the real challenges facing us. We have low unemployment and ours is a prosperous society, but a sizeable chunk of the population is not part of the work force and could be brought into it. Simply saying, Here is a job, go and get it, go for an interview will not bring them inwhat is needed is investment by the community in those individuals. Working with employers and the wider community, we must give them the skills, talents, experience and confidence that are so important to getting them into work. That will have a knock-on effect on crime, disorder and all the other things about which concern is often expressed. Making people part of mainstream society is one of our key tasks.
	My patch is one of the lucky, relatively privileged parts of the countrya nice area with nice houses, nice schools and very low unemployment. Even there, however, there are people who should be given the opportunity to work, having not worked for many years if they have even worked at all. That is a key part of the programme, and I think the two Opposition parties are wrong to want to get rid of that programme.
	I want to make some criticisms of the Liberal Democrats' proposals, particularly their proposal to abolish the Department of Trade and Industry. I was in Toulouse yesterday to see the unveiling of the Airbus. The Prime Minister said that once the A380 was under way, in full production, there would probably be about 100,000 jobs in the UK linked to and dependent on it. Many smaller companies will be involved as well as the two main companies, Rolls-Royce and Airbus Industrie.
	In proposing to abolish the DTI, the Liberal Democrats fail to recognise its importance to projects such as the Airbus. On several occasions during the eight years for which I have been in the House, I have lobbied both the DTI and the Chancellor for launch aid for the Airbus, which has been crucial to the UK's status as a major partner in the project. The idea that we can simply abolish the DTI puts our aerospace industry at risk. Moreover, the DTI provides export credit guarantees, which are crucial to the aerospace industry that employs thousands of people in my constituency in military aircraft production. Without the guarantees, exports of military aircraft from Wharton and Samlesbury in Lancashire would not be possible.
	While I am having a little go at the Liberal Democrats, let me point out that I shall take great care to ensure that my constituents who work to produce the Eurofighter in Wharton and Samlesbury know that if there were a Liberal Democrat Government, one of their first acts would be to tear up the contract that was signed by the Secretary of State for Defence for the second tranche of the Eurofighter. That, too, would put thousands of people in Lancashire out of workwork on something that people like me have supported for many years.
	It will be interesting to see whether the Liberal Democrat candidates in Lancashire include in their election manifestos, in a prominent position, their proposal to sack thousands of military aircraft workers in the county, or whether they will ensure that the proposal is seen only in parts of the country where military aircraft production is not an issue. The Liberal Democrats are very good at saying different things to different people, and because they are the third party their programme will never be properly scrutinised by the media. When their leader is interviewed, interviewers do not ask him for details of his party's spending and taxation programme because they know, as I do, that the Liberal Democrats will not form the next Government.

David Laws: Will the hon. Gentleman give way?

David Borrow: I shall be more than delighted.

David Laws: Is the hon. Gentleman in a position to give us a guarantee that the Government will go ahead and order all the Eurofighters?

David Borrow: I was at the Wharton factory before Christmas when the Secretary of State for Defence visited it, at the time when the second tranche of the contract for the Eurofighter was being signed.

David Laws: It was the third.

David Borrow: The contract that I was concerned about was the second tranche of the Eurofighter. The Liberal Democrats have pledged to tear up that contract and to sack thousands of workers in Lancashire. I will ensure that the people of Lancashire are aware of that commitment.
	I want to finish by briefly discussing the proposed cut in the housing budget. In areas such as mine, which have full employment and high house prices compared with other parts of the north-west, a particular economic constraint is imposed on businesses. Many employers in such areas are struggling to recruit people because there are no affordable properties for them to buy. There is a need for more social housing and for more affordable houses to buy. Such a change can come about only if the Government intervene in the market, which will require a budget of some sort. The Office of the Deputy Prime Minister has a crucial role to play and it can make a difference in areas such as mine by allowing housing associations to build new properties for rent, and by allowing local agreements to be reached on the building of more affordable properties.
	At a time of economic success, it is very easy to ignore many of the ingredients of it and to think that bodies such as the DTI and issues such as housing are not very important, but they do affect the continuation of that success. I have listened with interest to the Conservatives and I am sure that my constituents will take the same view as those in the vast majority of constituencies, namely, that the Conservatives' proposals are truly incredible. They will prefer to vote, when election day comes, for a party with a proven track record of low unemployment, low inflation, low mortgage rates and good public services.

Francis Maude: I declare the interests that appear against my name in the register.
	This is an important debate and I enjoyed the speech of the Chief Secretary to the Treasury, albeit not as much as I normally do. He is usually very flamboyant, but today he was much more restrained. I offer him this personal advice: if he carries on in that vein, there is a serious danger that at some stage he will achieve gravitas, which would do his reputation no good at all.
	The Chief Secretary inadvertently gave a certain amount away when he got himself into a great state about the form in which the James report has been produced. He held it up with disdainvirtually between finger and thumbseemingly saying, This is only a PowerPoint presentation, a mere set of slides. Feel the width of that compared with the Gershon report! Gershon is printed on heavy quality paper and it has a shiny cover. It is altogether a superior product. In a way, that was a paradigm of new Labour. Here we are discussing waste, but for the Chief Secretary the only issue arising from a comparison of Conservative and Labour approaches to waste is the way in which the reports are produced. A glossy report full of heavyweight paper is a proper report on waste, but a PowerPoint presentationgolly!could not possibly be the goods.
	What matters is not the form in which a report is produced but what one does with it. We should consider the significance of what has happened in the months since the Gershon report was unveiled with due ceremony and all the glitz that goes with any new Labour presentation. Instead of much-vaunted cuts, public sector employment has steadily risen month after month. The report is an emblem of new Labour: lots of spin, a glossy cover and heavy quality paper, but no action behind it.

Stephen Timms: I am listening with interest to the right hon. Gentleman's comments about the James report. Perhaps he will help us by saying whether there is in fact a report behind the published PowerPoint presentation, or is it true that, as Professor Colin Talbot said on Newsnight, callers to Conservative central office are told that it will not be published because
	it would give too much ammunition to our opponents?

Francis Maude: I am given to understand by my hon. Friends on the Front Bench that the James report exists in exactly that form. I commend the work that they have commissioned and done on this report, which is the most serious undertaken by an Opposition on this important subject for a very long time. The report certainly is available.

David Laws: This is a useful opportunity to clarify whether there is a report. Is the report that is published on the websiteadmittedly, it is fairly extensive, running to 173 pagesthe James report, or is it simply a summary of a detailed piece of work?

Francis Maude: It is flattering that the hon. Gentleman should ask me that question, but I am the humblest of Back Benchers and know nothing of these matters. However, I am assured by my colleagues on the Front Bench that that is indeed the report. It is a very serious piece of work, and it will bear all manner of scrutiny.
	The Gershon report's approach and the manner in which it was unveiledbut then not implementedis a mirror-image of this Labour Government's approach to tax. In their early days, they were very keen on this issue. The hon. Member for South Ribble (Mr. Borrow) mentioned speaking to people on the doorstep during the 1997 election. We all remember the Prime Minister saying in clear terms that the incoming Labour Government had no plans to increase tax at all. There were no ifs, buts or qualifications: he was perfectly clear. However, they had such plans all alongthey must have, because they were implemented almost immediately. As the Prime Minister had made that stark commitment, tax increases had to be introduced by stealthhence, the first raft of stealth taxes.
	The smoke and mirrors of the Gershon report and the Gershon process is the converse of that approach: it is public spending by stealth. The Government say, Of course we are not increasing public spending overall. We are cutting out all this waste and getting rid of lots of public servants. However, each week The Guardian runs a thick supplement full of advertisements for public sector jobs. So this is all about recycling: taking waste and recycling it into the front line. However, although money is going to the front line it is not coming out of such waste, because Gershon simply is not being implemented. It is a classic example of smoke and mirrors from the Chancellor, in an effort to cover up the fact that public spending is rising sharply and unsustainably. Such spending will place an increasing burden on the economy, making it much more difficult to deliver the growth that the Government hope for and that is essential if the country is to become increasingly prosperous.
	Whatever the colour of the Government of the day, it is in the nature of all Governments that public spending tends to increase. In Yes Minister, Sir Humphrey described this as the politician's syllogism. Something must be done and this is something; therefore, we must do it. For any politician, the something that comes most easily to hand is public spending. It is very easy to spend public money, and then to claim that one has done something and that the problem identified is being addressed. But simply spending money does not solve problems. The effect on public services of the very large amounts of money that this Government have spent since they took office illustrates that point. Such spending simply has not translated into anything like proportionate improvements in the quality of such services; rather, it has translated into burgeoning waste, which is why the James report is so credible. A great deal of money has been misspent, and a lot of surplus money is being wasted that could be saved.
	Of course, it is easy to spend money; it is much more difficult to make it translate into improvements. I believe that, over time, the state should take and spend a smaller proportion of the nation's income. That provides not only a stronger economy, but a stronger, more cohesive society. People do not just do more for themselves and their families: they do more for each other and for their communities. It binds society together. I do not believe that this is a better country if people think that they can contract out all their social obligations to the state. We are a better people than that. We want to carry responsibilities ourselves, not only for our families but for our neighbours, our communities and our society.
	The trend in the proportion of the nation's income spent by the stateup or downchanges only very gradually. I strongly support the proposition that a Conservative Government would seek to put that proportion on a downward trend. No cuts in public spending would be involved, because it would increase year on year, as it always does and always will do. The key figure is the proportion of the nation's income that is taken and spent by the state, and that has to fall if we are to have a healthy country.
	The Chief Secretary gave us some statistics about where Britain stands in relation to other European nations, but the countries that have shown the most vigorous economic growth in recent years include Australia, where the state's percentage of the nation's income is in the low 30s, and Ireland, which has shown the most dynamic growth in the European Union and where the state's share of the nation's income is again in the low 30s. The US is in a similar position. In some of the world's most vigorous economiesthe Asia-Pacific region shows vigorous growth, for examplethe state takes a much smaller share of the nation's income than is the case in this country.
	I make no apology, therefore, for believing in a smaller state. That is why I did not find the Government's proposals on university tuition fees as objectionable as some of my colleagues did. The proposals would increase people's personal responsibility. The scheme was bungled to accommodate the diehards on the Labour Benches and will not deliver what it promised, but the principle behind it is sound. The state should do a little less and people should take more responsibility for their own destinies and lives.
	The Government go on about the golden rule, and the Chancellor might just about be able to claim that he has stuck to his definition of it. It is a good rule and I am glad that my right hon. and hon. Friends are committed to retaining it, but it puts no constraint on the size of the state. If Labour wins a third term and if the Chancellor remains in his posttwo very big ifshe will have to increase taxes substantially if he is to stick to the golden rule, because he has built into the public spending plans an increase that is otherwise unsustainable. If that happens, the burden that will be placed on the wealth-creating economy will be increasingly hard to bear and will act as a constraint on the very economic growth on which the Government's plans dependnot to mention the prosperity of the country.
	I have heard new Labour Members and Ministers argue that what is important is the way in which public money is spent and what is delivered, not how much is spentas so many of their colleagues seem to believe. My hon. Friend the Member for North Essex (Mr. Jenkin) intervened when the Chief Secretary referred to the concept of earned autonomythe most repellent phrase in the new Labour lexicon. Apart from the fact that it is a contradiction in terms, the idea has built into it an assumption that the gentleman in Whitehall knows best. It means, We will give you a little bit of independence, if you behave yourselves, but don't worry, because you will always be on the end of the string. And there'll be a twitch on the string if we think that you are abusing your autonomy. However, if we seriously believe that people who are elected by their local communities to run local government are better able to judge what is right for those communities than we are at the centre, we have to accept the possibility that, in some cases, autonomy will not be used well. It is not a risk-free option. If we do not allow the possibility that autonomy might be used to make mistakes, we suppress the possibility that autonomy will be used in unpredictable ways to find better, more interesting and more dynamic ways to do things. Innovation depends on that, and progress stems from it. It is certainly where progress comes from in the private sector and it should do so in the public sector, if the strings are cut and genuine, unearned autonomy is granted.
	Occasionally, we see straws in the wind that hint that the Government are beginning to understand that principle. They pulled back to the centre control over hospitals, GP practices and schoolsby getting rid of grant-maintained statusbut they are now paying lip service to the idea of removing central controls. Practice commissioning sounds to many of us like GP fundholding, although the Government do not wholly believe in it so it will not work as well as it should. Foundation hospitals are not a bad idea, but again the proposals have been adulterated to accommodate the diehards on the Labour Benches. Foundation hospital status will not, therefore, give local managers the ability to run things themselves.
	Money will be spent well, and innovation and best practice will develop and spread, only by letting go of the strings and getting rid of the risk-averse culture. Whitehall is a natural home for the risk-averse culture and it is the job of politicians to alleviate its effects. The Government have tended to accentuate it, and that is why we have had a huge increase in public spending without a proportionate increase in the quality of services.

Mark Hoban: My right hon. Friend makes some important points about the power that autonomy brings. Is he aware that the state sector schools that topped last week's value-added league tables were city technology colleges, the schools with the most freedom? The schools that came at the lower end of the table were community schools, which have the least freedom in the state sector. That demonstrates the power of autonomy to raise standards and ensure that money is spent effectively.

Francis Maude: My hon. Friend is absolutely right. I remember that several of the secondary schools in my previous constituency sought and obtained grant-maintained status. I remember visiting one after it had become independent, and it was the same school, with the same buildings, same staff, same parents and same pupils. I asked the staff how they felt about the new regime. They said that they were all working much harder, but they were loving it because they could make decisions and make things happen. The school had a different feel about it. Members of Parliament all know that when we go into an institution we can feel very quickly whether it has a crackle of energy, enthusiasm and drive. We can tell whether an institution is alive and thriving. Independent schools and hospitals run by people who have the power to make and implement decisions and who can take opportunities are living, thriving and dynamic institutions. The position is exactly the same in the private sector.
	Finally, on tax, my right hon. and hon. Friends have made the right equation, and there is relatively modest scope for tax reductions in their proposals. That is responsible, and it betokens an honest approach to the electorate that is both welcome and essential. It is a big contrast with Labour, who said that they did not have any plans to increase tax at all, yet made 66 stealth tax increases. By and large, people want to live in a society and an economy in which taxes are fairly low, but they want public services to improve. When we take office, we will have to reform public services quite radically. Structural reforms are needed, mostly to achieve the Conservative policy of much greater autonomy for the public services.

David Laws: The right hon. Gentleman has talked about the importance of being honest about taxation and being realistic about taxation plans. In that vein, is he honest enough to admit that his party's plans still involve an increase in the tax burden in the next Parliament of almost 2 per cent.?

Francis Maude: I am tempted to tell the hon. Gentleman that we will show him ours if he will shows us theirs, as he has been remarkably recalcitrant, diffident and reticent about revealing the full extent of the Liberal Democrats' tax increases. My hon. Friends are right to be restrained, as we do not know what the public finances will look like. However, there is a black hole in them and borrowing has risen to an unsustainable level, so spending must be constrained. It is undoubtedly the case that significant structural reform of the public services in the short term costs money, and does not save it. If reform is done well, in the medium to longer term the money buys more for the community and users of public services. It is therefore right to undertake reform, but in the short term it is a constraint on the ability of any Government to reduce taxes.
	We should continue to make the case not only that we have a stronger economy and a better, more cohesive society and stronger communities when taxes are lower. I thoroughly commend the plans that my right hon. and hon. Friends introduced earlier this week. Theirs is an honest, straightforward, well thought out approach, and it deserves the support not only of the House but of the country.

Stephen McCabe: A child aged five when the Tories came to powerI shall call him little Jim rather than little Georgewould be 31 today. He would have had the misfortune to be educated in an overcrowded classroom, and there would have been insufficient attention to numeracy and literacy at his school. The building itself was probably falling apart, and there would not have been enough teachers. His father was probably one of the 3 million unemployed people thrown on to the scrapheap by the Conservatives, who not only told us that that was a price worth paying but crowed about it. When little Jim's mother was sick, she would have to wait in the queue, as there were about 500,000 people on NHS waiting lists.
	Just when the family thought that things could not get much worse, they lost their house as a result of negative equity. The very foundations of their life were destroyed and, while all of that was happening, they lived in an area where crime was doubling and the number of police officers was reduced. That is young Jim's early lifea world of despair, desolation and desperation.

David Laws: And then came 1997.

Stephen McCabe: Jim was part of an ordinary, decent, hard-working familyhe was not born into the lap of luxurylike many other people in the hon. Gentleman's constituency and in my own. Their lives were laid waste by the Conservatives' deliberate actions when they were in power. It is quite true that things changed for Jim in a way that he could not have envisaged after the terrible experiences of his early life. At the age of 23, he secured training and a job through the new deal and he now has another job, which is secure and much better. He and his wife have been able to take advantage of stable interest rates to buy a modest home. The combination of tax credits and the minimum wage mean that Jim and his wife can provide for their children. They can run a small car and manage a family holiday. They have been able to build a modest savings account.

Andrew Turner: What would Jim's plight be if he were in the position of many people in my constituency? Having received overpayments of tax credits last year, they have been deprived of the tax credits that they expected on the basis of the Inland Revenue's calculation and, moreover, they have had money taken away from them this year. They are therefore living on far less this year than they did last year because of the incompetence of the hon. Gentleman's Government and the Chancellor.

Stephen McCabe: I suppose that when one does not like to be reminded of one's record it is tempting to take the hon. Gentleman's approach. I simply make the point that tax credits are available now. Any failure in their delivery is regrettable. We all agree that anything that makes life tougher for people should be put right, but the reality is that nothing like tax credits was available when the Tory party was in power.
	Not only have things improved slightly for Jim and his wife but his child is taught in a brand new classroom, and is excelling in numeracy and literacy. He is supported by one of several new teachers who were recently recruited to his school as well as by a helpful classroom assistant. Jim's mother still suffers periodic bouts of ill health, but she is treated at a brand new health centre, which is far removed from the Dickensian workhouse that she used to attend.

Mark Hoban: If life is so good, can the hon. Gentleman explain why a hard-working mother in my constituency cannot find an NHS dentist to treat her children when they need dental care?

Stephen McCabe: Like the hon. Member for Isle of Wight (Mr. Turner), the hon. Gentleman would like to forget the record that I am describing. No one denies that there are problems with dentistry in some parts of the country, but we all know who created the original problem by cutting training opportunities for dentists.
	Jim's mother receives better medical treatment. His father is now a pensioner, and benefits from free eye tests, the winter fuel allowance, a free TV licence and pension credit. That is the lesson that people like the hon. Member for Tatton (Mr. Osborne), who has conveniently forgotten the excesses of the last Tory Government, need to learn.

Lembit �pik: The hon. Gentleman paints a rosy picture of a utopian society in which I wish I lived myselfbut I do not. He will remember that his Government promised to solve the crisis in the NHS dental service 2001 and I can certainly back up what the hon. Member for Fareham (Mr. Hoban) said. Many people cannot obtain dental provision in my area, Montgomeryshire, at all. Can the hon. Member for Birmingham, Hall Green (Mr. McCabe) tell us how he thinks this serious problem can be resolved? It is a long way from utopia for those who suffer serious dental problems as a result of the Government's failure to solve the crisis.

Stephen McCabe: I am not a Liberal so I do not tend to have utopian fantasies. I am trying to depict a straightforward contrast between the situation during the last Conservative Government and the reality of what has happened since Labour came to power. That is all I am doing; I am simply pointing out what the life possibilities were and how they have changed. I would be the first to concede that we need to do more in the NHS across the board, and that we certainly need to do more to increase the availability of dentists. My view is that that will be best achieved by investment rather than cuts. Any programme designed to cut out the chance of increasing the number of dentists will not help the situation. That seems painfully obvious.
	The reality is that nowadays we are living with the lowest inflation since the 1960s. Interest rates are at their lowest for 40 years and we are living through the longest period of economic growth that anyone can recall[Hon. Members: Since when?] The figure varies, but I am told that it is at least 200 years.
	What is certainly not in dispute is the fact that our public services are expanding; our schools are improving, crime is falling and employment is at record levels, yet at such a time we are told by the Opposition that they want to turn the clock back. They want to go back to cuts. They want to scrap the new deal so that they can restore unemployment to the levels we saw when the Leader of the Opposition was last in government. They want to axe key business support programmes, despite the protestations of the CBI and Stephen Alambritis of the Federation of Small Businesses. The party of BSE wants to halve the budget of the Food Standard Agency, damaging public health and doing untold damage to national and international confidence in the standards of our food. They want to abolish key NHS targets so that there will be lower standards and waiting lists will rise once more, and of course they want to cut Ofsted and LEA budgets covering things such as special educational needs, about which they say they are so concerned, as well as music classes and truancy programmes.

Mark Hoban: When the hon. Gentleman's constituents ask for their share of the 15 billion increase in school spending, what will he say to them?

Stephen McCabe: My constituents will comment on the fact that Allenscroft school is about to be completely rebuilt, that Hollywood primary school has recently been refurbished and that Colmore junior school, which achieved excellent results recently, has just recruited new classroom assistants and teachers. They will tell me that the secondary schools have more resources than ever and urge me to tell the Chief Secretary and his colleagues to continue on that path.
	I have not heard one commentator endorse[Hon. Members: Except Jim.] It may be entertaining, but we were given a very interesting lecture by little George at the outset. He wanted to forget what had happened during all the years that his party were in power, so I am equally entitled to contrast

Mr. Deputy Speaker: Order. The hon. Gentleman must refer to hon. Members of the House in the proper way.

Stephen McCabe: I apologise, Mr. Deputy Speaker. No offence was intended.
	I was saying that I had not heard one single commentator treat the Opposition's plans seriously. Those plans are frightening and damaging but no one really treats them seriously. Everyone knows that they are merely a fig leaf to get a failing and weakened leader through an election. What is guaranteed is that as soon as that election is over the first dramatic cut will be the leadership of the Tory party. That is what is happening at the moment and that is what we can expect.
	My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) noted earlier that the Tory motion referred to 66 tax rises and he helpfully pointed out that the Conservatives had arrived at that number by adding together the various changes listed in the Red Book. Conveniently, they have ignored the 232 tax cuts, which can be demonstrated in exactly the same fashion: tax cuts such as corporation tax to help business, jobs and exports; the doubling of capital allowances to small and medium enterprises and tax credits to help hard-working families. All are at risk under that increasingly desperate shell of a once proud political party.
	What can we really expect? The shadow Chancellor, who has established some reputation for honesty, is always willing to let the cat out of the bag. He has told us exactly what we can expect. Pain. That is the Tory message to the electorate. It is not painless and there is no point in trying to pretend that it is painless, he said. Now, we have some idea of what sort of pain is intended. This is a slash and burn exercise. The proposals are way above the 2.5 per cent. efficiency savings that Sir Peter Gershon said were possible. He warned that if we went above that we would do untold damage to the economy and our public services. It is not acceptable to come to the House with some kind of PowerPoint presentation that ignores that basic fact. If the Opposition's proposal is to make cuts that go beyond what Gershon said was possible, they have an obligation to spell out in detail what those cuts will be and where they will fall. To do anything else is deliberately to try to deceive the British people.
	It seems to me that I am entitled to ask exactly what additional cuts are intended. I say that because I noticed earlier that the hon. Member for Tatton was happy to quote the Institute for Fiscal Studies when he felt that it supported his argument. In return, perhaps he would care to explain the comments of Robert Chote of the IFS who has warned that currently only a third of the Tory plans have been costed and that they will have to go much further and find much deeper cuts. I want to know where those cuts will fall.
	I am conscious of the fact that the Environment Agency has been cited. It is possible to make deep cuts in the Environment Agency, and we know exactly what that would result in: more flooding of people's homes, more illegal fly-tipping, fewer prosecutions of cowboys and more risks to public health. If that could be done to one agency, which other agencies that would be dismissed as meaningless quangos would also be chopped to the bone, and which other services that currently exist to protect the British public would be taken out of action? I am entitled to ask that in such a debate. In fact, I shall go further: if the Conservatives have accounted for only a third of their cuts to date, I want to know where the other two thirds would come.
	Given the Conservative party's record when in power, I suspect that the Conservatives would start to close schools and hospitals. If so, I want to know which ones in Hall Green the Conservatives intend to take out of commission. Would they cut the new classrooms at Allenscroft, Hollywood or Colmore schools? Which schools and hospitals are on the secret Tory hit list? We are entitled to know. The Conservatives cannot give a PowerPoint presentation and ignore the things that people are really concerned about.
	I was astonished to hear the hon. Member for Tatton boast that he would spend 6 billion to sack 230,000 diligent public servants. Given the experience of unemployment in this country under the Tory Government, I was astonished that a shadow Minister could gloat about the fact that he plans to spend 6 billion of public money to throw 230,000 diligent civil servants on to the scrapheappeople who work in the new deal, helping others to find work and employment, and people who work in the strategic health authorities, of which the hon. Gentleman is equally dismissive.
	Of course, as I pointed out earlier today, we would not know about the abuse of elderly people at the Maypole nursing home in Hall Green if it had not been for the actions of the strategic health authority's staff in uncovering that scandal. The decent civil servants who work at the Environment Agency and the people in the regional development agency who are trying to provide jobs and regeneration in some of the most run-down parts of Birmingham are the kind of people who would be thrown on the scrapheap. Of course, as we heard yesterday at Health questions, the Conservatives would also like to sack the accountants who work in the health servicethe very people who are capable of tracking budgets, trying to avoid waste and ensuring value for money.
	I conclude[Interruption]that I can agree with only one part of the motion. Opposition Members will hear an awful lot more between now and the election, so they should not panic.

Mark Francois: Some of it might actually make sense.

Stephen McCabe: The simple problem is that it will not make any sense to the hon. Gentleman because he does not realise what mass unemployment does to people's lives. He does not care about cuts in the health service, about the effect of crime on people or about negative equity. He thinks that those are matters of fun. I suggest that he speak to some of the people who have had to live with the trauma of those experiences, which the Conservative party inflicted on their lives.
	I agree with one part of the motion: there is a need for a change of direction. It is time the Tory party abandoned its back-to-the-future vandalism and started to recognise that the British public constantly reject the Conservatives because of their false prospectus and their fantasy policies.

Quentin Davies: The kindest thing that I can say about the contribution made by the hon. Member for Birmingham, Hall Green (Mr. McCabe) is that he was obviously gallantly and valiantly responding to a plea from his Whips to come into the Chamber to fill up some time so as to disguise the Labour party's evident embarrassment and indifference towards this very important question.
	The need to monitor spending and control the Executive's spending appetite is the first role of the House. We ought to discuss that matter more often than we do. I congratulate my hon. Friend the Member for Tatton (Mr. Osborne) and right hon. and hon. colleagues on giving us this opportunity and on inviting Mr. James and his colleagues to produce the excellent report that we have all received. It is very easy to get it off the internet; my secretary did so this morning with no difficulty at all.
	The report is an impressive piece of work, and it is particularly important that public attention should be focused on the extremely worrying growth in public expenditure over the past few years and the fact that we are now running a 40 billion-a-year deficit that must be paid for, with interest, by future taxation. That is a clear burden on future generations. This is the right moment to focus on the issue.
	The report brings out absolutely astonishing, spectacular and frankly scandalous revelations. For example, I have learned that the administrative costs of the Department for Culture, Media and Sport have more than doubled since 1997, although its responsibilities have increased only trivially. It is clear that bureaucracy in that Department is out of control. I have learned that the National Endowment for Science, Technology and the ArtsNESTAwhich distributes grants under those headings, has given away 7.3 million, yet its bureaucracy has cost 5.9 million. That is a scandalous waste of public money by any standards, so I am grateful that the report has brought that out.
	Some aspects of the report are slightly weaker than others. I am not quite convinced about savings of 1 billion or more in defence procurement in the Ministry of Defence. Additionally, the person who was responsible for drafting the part of the report on overseas aidI know a little about the subject because I serve on the International Development Committeewas not up to the standard of those who wrote the rest, because that section is very muddled. It says:
	the EU is widely recognised as one of the least effective aid channels, since only 52 per cent. of EU overseas development aid goes to low income countries.
	It is a fundamental error to confuse giving aid to poor people with giving aid to poor countries. The largest development programme that we have is to India, and although that is a middle-income country, there is enormous poverty in Orissa, Bihar and other states, so we are right to continue to give such aid. The fact that only 52 per cent. of EU aid goes to low-income countries says nothing about the efficiency of the programme.
	The James report suggests splitting the EU aid budget
	to separate aid aimed at EU Peace and Security from aid aimed at poverty reduction.
	Such a split already exists because there is a separate budget under the external relations part of the own resources budget that is related primarily not to poverty reduction, but to building stability in the near abroad. The budget makes a useful contribution to building stability in the Maghreb, the Balkans and the Commonwealth of Independent States, and I think that we are committed to it. Additionally, the European development fund is administered by EuropeAid, which is a completely different bureaucracy. The split already exists, so I am mystified by the proposal.
	The report talks of
	bringing back to the UK the voluntary contribution that . . . goes to the European Development Fund.
	The contribution is voluntary in the sense that it has nothing to do with our contribution to the EU's budget and that not making it would be consistent with our obligations under the treaties, but it is not voluntary in that we are committed to making it under the Cotonou agreement and we would let down many poor countries if we did not do so. The section of the report is bizarre and muddled, so it must be reconsidered.
	Several aspects of the report are modest and we could have been more ambitious about cutting Government expenditure in some areas. I was surprised that there were no proposals to reduce quangos in the section on the Department for Environment, Food and Rural Affairs, so I hope that we can consider doing that.
	There is an open question about whether we should provide legal aid at all for non-criminal cases in this country, given that we have provision for contingency fees. Although I do not have time to go into that point now, there must be a case for restricting access to legal aid for civil cases to UK residents. We have that restriction in the national health service, but apparently not under the legal aid budget, so surely legitimate savings could be made. We know from the newspapers that scandalous abuses of civil legal aid have involved non-UK citizens.
	When considering the Home Office, we should think about savings in the Prison Service. The Federal Bureau of Prisons in the United States raises more than half its costs through prison work programmes, and I have felt strongly about that matter since I was a Parliamentary Private Secretary in the Home Office under Ken Baker. The Home Office said that it would try to do something, but I encountered enormous resistance to the idea in the Prison Service. We should take the matter up.
	On the Department for Education and Skills, I think that we could be braver than the James report suggests and abolish local education authorities altogether. It seems to me that there is a residual function in looking after children with special needs and those who have been excluded from mainstream schools, but that concerns a very small number of people and does not require an LEA. All their regulatory, advisory and inspection functions could and should be totally closed down.
	I have a final, personal contribution to make. This is worth billions, and I think we should consider it urgently. I propose the introduction to the NHS of compulsory generic prescribing. That is to say that when a doctor prescribes a pharmaceutical compound or combination of compounds, the dispensing pharmacist should where possible, if they want to be reimbursed by the NHS, dispense one that is ex-patent and available in generic form, often at a cost that is an order of magnitude lower than the branded version. We should not be using taxpayers' money to pay for packaging or brand; we should be paying simply for the clinical compound that is required.
	That is my additional suggestion. I am moving forward on the excellent basis that has been established by the James report, which I hope will inform the debate that we will be having over the next few months, when the rising burden of public expenditure and taxation will be, as it should be, one of the major themes in the coming election campaign.

Mark Francois: It is a pleasure to sum up for the Opposition this afternoon, after what I think we can all agree has been a rather lively debate. It was opened by my hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chief Secretary, who provided a robust advocacy of our new value for money proposals, of which more again in a moment.
	That was replied to by the Chief Secretary to the Treasury. It is a funny old thing, politics. He may recall that we first debated together back in 1997 in a secondary school in Wembley, I think, when I was the Conservative candidate in Brent, East, the seat neighbouring his. May I compliment the right hon. Gentleman on his consistency? He had a particular debating style back then, and I hope that he will not mind me saying that it has not altered much even to this day.
	May I correct the right hon. Gentleman on a couple of points? With regard to the depth of our research, Gershon, which he prayed in aid, is a 60-page report, of which only some 10 pages are specifically about savings, whereas we have published all the results of our research on a website. At Prime Minister's questions earlier today, the Prime Minister quoted, in detail, from our report on the website. If there is enough detail in there to satisfy the Prime Minister, perhaps the Chief Secretary and the Financial Secretary should take it on board.
	There is a great problem with the new deal. We have 1.1 million people in this country under the age of 25 who are now not in employment, education or training. The new deal has failed those young people. The acronym for that group is NEET. I have to tell the Chief Secretary that Labour's record on the matter does not seem very neat to me.
	I hope that I do not misquote the hon. Member for Yeovil (Mr. Laws), but he said that the James report was extremely helpful and detailed. He also said that the costings are perfectly legitimate. We welcome that acknowledgment from the Liberal Democrat spokesman of the depth of work that has gone into this process. The hon. Gentleman admonished us gently on the list of 168 quangos that we would abolish, pointing out that some are regional bodies that crop up a number of times. That is because the Government have balkanised a number of national organisations in their obsession with a regional agenda; Sport England is just one example. It is not our fault that the Government did that, and in abolishing those organisations, we obviously have to act regionally, which adds to the total.

David Laws: Since the hon. Gentleman is trying to sum up the debate and cite all the comments that have been made, may I ask whether he agrees with the hon. Member for Grantham and Stamford (Mr. Davies), who described certain parts of the James report as bizarre and muddled?

Mark Francois: No, I do not agree with all of that. I shall discuss my hon. Friend's contribution in a moment, but first let me ask the hon. Gentleman whether he agrees with what I understand his hon. Friend the Member for St. Ives (Andrew George) said on BBC Radio 5 Live in a debate at lunchtime today: Trust us, we will put your taxes up.
	The hon. Member for South Ribble (Mr. Borrow) spoke about reaching a threshold beyond which people in Britain simply are not prepared to pay any more tax. I have some sympathy with his argument; unfortunately, he was unable to tell us how the Labour party will then fill the Chancellor's black hole. I put to him the point made by Mr. Stephen Lewis, an economist at Monument Securities, in The Guardian of 3 December:
	It is one thing for a chancellor to miss his borrowing target because economic conditions have let him down. It is quite another when the error occurs despite the economy performing in line with his expectations. The only conclusion then to be drawn is that the public finances are out of control.
	I invite the hon. Gentleman to think carefully about that.
	My right hon. Friend the Member for Horsham (Mr. Maude) delivered a thoughtful speech, as one would expect from one of his experience in these matters. I take it that he would be in sympathy with the comment in The Sunday Times of 16 January that
	according to Labour's version of things, economic stability and success did not start until after May 1, 1997. That is wrong. Low inflation was well established before Blair was elected, and the current record run of growth began in 1992.
	The hon. Member for Birmingham, Hall Green (Mr. McCabe) made an entertaining contribution in which, in effect, he rewrote Labour's election slogan to say, After seven years and billions of pounds, things have got ever so slightly better. He treated us to the views of his notional constituent, Jim, and some of his experiences. I suggest to him that, under the Labour Government, in addition to what the hon. Gentleman told us, Jim's family have had to endure 66 tax rises, probably cannot register with an NHS dentist, and have probably been burgled twice in the past five years. Jim is now struggling to find the money to pay the tuition and top-up fees for his children, which the Labour Government promised him he would never have to find.
	Perhaps on our behalf the hon. Gentleman will forward to Jim a copy of The Economist of 15 January, which contains an article intriguingly titled, Boasters, with the subtitle, The dubious self-congratulation on Labour's campaign posters. The article concludes:
	The economy has certainly been doing better in the past few years than it was doing earlier. But the turning point was not in 1997, when Labour took office, but in 1992, when the Conservatives adopted an inflation target.
	I say to the hon. Gentleman, please pass that on to Jim with our compliments and invite him to vote Tory next time.
	To my hon. Friend the Member for Grantham and Stamford (Mr. Davies) I say only that he has a long-standing interest in certain matters and he has expressed concern, but I assure him that any savings found in the Department for International Development are to be reinvested in the Department, so the amount of money going to international aid will not decrease under our proposals. In fact, it will most assuredly increase. However, he has experience of those matters and if he would like to come and discuss them with Front Benchers, we would be delighted.

Lembit �pik: I request clarification. The hon. Gentleman will be aware that the shadow Secretary of State for Wales, the hon. Member for Leominster (Mr. Wiggin), said in the most recent sitting of the Welsh Grand Committee:
	the block grantwill not be touched by any changes in funding.
	When the Secretary of State challenged him by asking
	is the hon. Gentleman saying that he has a unique exemption for Wales from the shadow Chancellor's 35 billion-worth of cuts and that Wales will be completely immune to those cuts?
	the hon. Gentleman replied:
	The block grant is immune.[Official Report, Welsh Grand Committee, 7 December 2004; c. 11.]
	Will the hon. Member for Rayleigh (Mr. Francois) confirm that and say why Wales is to be excluded from the Conservatives' strategy?

Mark Francois: I can most assuredly confirm that under our plans Wales will receive precisely the same amount of money that it would from the Labour Government under their plans. There is no difference. In return, may I point out to the hon. Gentleman that Gladstone, whom his Front-Bench spokesman mentioned, once wisely advised leaving money to
	fructify in the pockets of the people?
	Forty Liberal Democrat tax rises would make that impossible.
	In the two minutes or so that I have left to speak, I wish to make the point that a great deal has changed in the past seven years. In 1997, all the talk was of prudence and of the Labour Government never repeating their predecessors' mistake of taxing and spending and getting into financial trouble. Now we find that most of the major economic forecasters the Organisation for Economic Co-operation and Development, the International Monetary Fund, the Institute for Fiscal Studies and the ITEM Club agree that the Chancellor has a burgeoning black hole in his finances, to the point where, if Labour was somehow re-elected, the consequence would be massive tax rises to try and fill it.
	I conclude, as my hon. Friend the Member for Tatton started, by asking the Financial Secretary which taxes Labour would put up to fill the black hole. Would it put 2p on the basic rate of income tax, would capital gains tax be levied on principal properties, would VAT be imposed on food, or would there be a 10 per cent. increase on national insurance contributions to blow away the upper earnings limit once and for all, as many of us have suggested the Chancellor has long wanted to do?
	The British people will have a clear choice at the general election. They can vote for a high-spending and high-taxing Labour Government who would almost certainly raise taxes to fill their black hole, or they can vote for a Conservative Government who have identified 35 billion of savings, of which 23 billion would be reinvested in public services, 8 billion devoted to filling the black hole, and 4 billion returned to the people in tax cuts. That is a clear choice for the people of this country. They can have tax and spend socialism with Labour, or value for money under the Conservatives. I am confident that they will choose the latter, and I commend our motion to the House.

Stephen Timms: In 1997 Britain's public services were in a state of crisis. For years, all the energy of Government had been focused on spending cuts. The view was being spread that the time for public provision was past and that the way of the future was cuts and privatisation. This week, we discovered that the Tories have learned nothing in the eight years since.
	In 1997, everybody could see that the public services faced enormous challenges. There had been growing demands but inadequate investment, and new pressures but old answers from the Tory Government, who were unable to provide the resources to meet the new challenges. Many people believed the Tory propaganda that high-quality public services were incompatible with a successful modern economy. They thought the Tories were right that the only way forward was cuts and privatisation, that there was no alternative and that public provision was doomed to underinvestment and decline.
	In the eight years since 1997, we have proved that the Tories were wrong. We have shown and the British people have seen that rising investment to rebuild our public services has gone hand in hand with the strongest economy that any of us can remember. Between 1979 and 1997, the UK was the least stable economy in the G7 except for Canada, with all the problems for the British people that were caused by boom and bust. Since 1997, we have been the most stable economy in the G7, bar none, and we have benefited from unprecedented investment in services.
	As a consequences, we see better results in our schoolsmore children doing well at 11 and at GCSE. There have been more than 28,000 more teachers since 1997, there is more equipment in classrooms, school buildings have been repaired and refurbished, as my hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) and others pointed out, and there are more resources for higher education and colleges. For the first time in their careers, many people in education are confident that they have the resources they need to deliver in the circumstances of modern Britain.
	In the health service, the number of people waiting more than six months for in-patient treatment is down 78 per cent. since 1997, and the number waiting more than 12 months is virtually nil; it was 30,000 in 1997. Waiting times in accident and emergency departments are down. There are 77,000 more nurses, 19,000 more doctors and more in training than ever before.
	Crime rates are down 30 per cent. since 1997, and there are 14,000 more police officers. Police numbers are at record levels, and there are already 4,500 community support officers. As a senior police officer in my constituency told me before Christmas, the Labour Government have given him and his colleagues for the first time in his career both the powers and the resources to do the job that Britain needs. That has been the value that we have delivered for taxpayers' money. Britain does not want to go back to the bad old days of cuts and underinvestment. Instead, we need to build on the historic improvements that we have seen in the period since 1997.

John Randall: On the question of value for taxpayers' money, can the Financial Secretary assure me that the Treasury will give detailed scrutiny to the unfolding financial scandal of the Paddington health campus?

Stephen Timms: I am certain that those who are following that development will give it the scrutiny that it needs.
	The progress that we have made has been because of, not despite, the remarkably successful, prudent stewardship that the economy has benefited from since 1997inflation down, interest rates at historic low levels, and unemployment today lower than at any time under the Tories. From the day the Tories were elected in 1979 until the day they were ejected in 1997, unemployment was never as low as it has now been for the past four years. Who wants to go back to 3 million unemployed?

Quentin Davies: The hon. Gentleman talks about good stewardship. How was it that the National Endowment for Science, Technology and the Arts gave away 7.3 million and incurred administrative costs of 5.9 million? Is that good stewardship?

Stephen Timms: I hope that I will have the opportunity to comment on what the hon. Gentleman said about the James review. He made some interesting points. He praised some parts of it and spent rather longer criticising other parts of it, describing one as bizarre. He spent some time on the James report. We have seen the PowerPoint presentation available on the Conservative party website with 174 slides, 12 of them identical referring to the James review of taxpayer value and accompanied by a rather fetching photograph of Mr. James. I hope, for the sake of the Conservative party Front-Bench spokesmen, that there is the detail behind that PowerPoint presentation that a work of that kind requires. We gathered from the Front-Bench spokesman that the Conservative party will not publish that detail, and, indeed, callers to Conservative central office on Monday were told that it would not do so because that would give too much ammunition to the party's critics, which is probably absolutely correct.
	Independence for the Bank of England, the symmetric inflation target, the golden rule, the sustainable investment rule

Quentin Davies: Will the Financial Secretary give way?

Stephen Timms: No, I will not give way again.
	That framework has delivered not only unprecedented stability, but the resources for investment, long overdue and desperately needed under the Tories, delivered under Labour. We now need to build on those achievements, to maintain the investment and to reap the benefits for Britain

Quentin Davies: On a point of order, Madam Deputy Speaker. Can you discover whether something is wrong with the microphone system in the Chamber? I intervened, at the Financial Secretary's invitation, to ask a question a moment ago. He took the question, but appears not to have heard it.

Madam Deputy Speaker: That is not a point of order for the Chair.

Stephen Timms: This has been an illuminating debate. We still do not know the detail of the Conservative party's plans; it has published only the bullet points. But we do know that the numbers do not add up and that they fail the credibility test. As yesterday's leader column in the Financial Times said:
	The tax plans unveiled by the Tories fail the credibility test.
	It is worth reading a little more. It says:
	The White Queen in Lewis Carroll's Alice in Wonderland claimed she had believed as many as six impossible things before breakfast. The Conservatives are less ambitious in wanting voters to believe in only three.
	One thing we do know is that even on the basis of those numbers that fail the credibility test, the Tories claim only that they will release 4 billion a year for tax cuts by 200708, but they have announced that there will be tax cuts in their first Budget after being elected. The money can come only from more borrowing, putting at risk exactly the remarkable stability in the economy that has been priceless for us over the past eight years.
	We also know that the Tories want deep cuts. Even all those cuts that we can glean from what we have seen in the James reviewscrapping the new deal, increasing unemployment by privatising and reducing funding for jobcentres, halving the Food Standards Agency, scrapping support for small businesses, scrapping NHS Direct, scrapping NHS improvement targets, even closing the National College for School Leadership, a particularly spiteful proposalgets us less than half way to the cuts that they have announced that they will deliver by 2012. Yesterday, the Institute for Fiscal Studies rightly pointed out that the Conservative party has announced only one third of the spending cuts that it plans to make by 2012. We know where those cuts lead, because we have been there before, and they would be a disaster for Britain, which will be the verdict of the British people.

Question put, That the original words stand part of the Question:
	The House divided: Ayes 147, Noes 358.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
	Madam Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House believes that economic stability is the foundation for continued investment in public services; welcomes therefore the lowest inflation since the 1960s, lowest interest rates for 40 years and the longest period of economic growth for 200 years; further welcomes this Government's record investment in public services; believes that it is important to ensure taxpayer value for money and therefore welcomes the fact that the Government is making efficiency savings to release resources into frontline services; further welcomes the fact that Sir Peter Gershon has identified over 20 billion efficiency savings across the public sector and notes that he said that to go further than the efficiencies he identified would put at risk the delivery of frontline public services; and further believes that any proposal to make cuts in public spending would not only damage frontline public services but the economy as a whole.

Farming and Rural Communities

Madam Deputy Speaker: I inform the House that Mr. Speaker has selected the amendment tabled by the Prime Minister.

James Paice: I beg to move,
	That this House regrets that self sufficiency in indigenous food and drink products has fallen significantly since 1997; supports the principle in CAP reform of decoupling support from production but believes that the Government has failed to consider the implications for the countryside and food security of its inept implementation of this reform by creating a complex system of entitlements and cross compliance wholly contrary to the objective of simplification whilst failing to reduce the current burden of regulation or to enable farmers to compete with imported food not produced to British standards; laments the fact that there are now more officials in the Department for Environment, Food and Rural Affairs than there are dairy farmers in Britain, and that the workforce in agriculture has fallen by 15 per cent.; recognises that many landscape features of the English countryside were created by historic farming practices and believes that the promotion of biodiversity and care of the countryside is best achieved by a profitable agricultural industry; and considers that the continued attacks on the countryside through unacceptable levels of development, an obsession with wind farms and the closure of rural services are the actions of a Government with no instinctive understanding of the needs of farming and rural communities.
	For 57 years, successive Governments of Britain have encouraged British farmers to produce more of our food. By 1997, those farmers, together with those responsible for the genetic improvement of our crops and livestock and for pesticide development, had almost tripled domestic food production. Of course, there has been a price to pay for that success. In parts of the country, the landscape changed as hedges were removed and fields were drained, and some of the early pesticides proved to have serious consequences for our wildlife. However, almost all of that stopped at least 20 years ago. Indeed, since 1980 the woodland area of this country has increased by 29 per cent. and many species of birds have recovered, although I accept that not all have done so.
	There has been a further price to pay, involving money. We now have higher food prices and higher taxes. Since the early 1980s, there has been an increasing clamour from all political parties for reform of the common agricultural policy. That reform began in earnest in 1992, but the changes that came in on 1 January this year are far more dramatic. Before I address those changes, I want to reflect on what has happened in the past seven years under this Government.
	After that tripling of farm output, it has now fallen by 5 per cent. Farming incomes have fallen by 8 per cent. in real terms and the labour force has decreased by 15 per cent. Self-sufficiency is down by 4 per cent. We have had an outbreak of foot and mouth disease, but we still do not know how that disease got to Burnside farm. Apparently, it arrived in swill, but there has been little or no effort to find out. Bovine tuberculosis has rocketed by 65 per cent. and is destroying our cattle herds in many parts of the country while the Government sit on their hands paralysed. Only last week, the Minister said that this did not affect dairy profitability. It was this Government who broke up Milk Marque, and the dairy industry is now on its knees with an income last year of just half the minimum wage.

John Greenway: I am grateful to my hon. Friend for giving way so early in his speech. Is he aware that more than a dozen major milk producers in my constituency have stopped production in the past two years? Almost every month, there is a dairy herd for sale. On self-sufficiency, we have a balance between sugar production and sugar consumption in this country. Does he agree that that should be the target for any negotiations on the reform of the sugar regime?

James Paice: I am sure that virtually any Member who represents a rural constituency will be able to tell a similar story about the decline of dairy herds. It is happening across the country. Of course, all of us understand that things must change and, as I shall say in a few minutes, they cannot go on as they were

Lindsay Hoyle: Will the hon. Gentleman give way?

James Paice: In a moment.
	The dramatic decline of our dairy industry poses potentially huge problems for our rural communities and the rest of the country. Later, I shall suggest measures that a Government with a real interest could take to try to improve things.

David Heath: Will the hon. Gentleman give way?

James Paice: In a moment.
	I also want to touch on the issue of sugar, which my hon. Friend the Member for Ryedale (Mr. Greenway) raised, and which I had intended to raise later. He referred to it in the context of self-sufficiency. He is absolutely right that the sugar regime needs to be reformed, and I made it clear in the House last week that we accept that. That reform, however, must allow the most efficient producers and processors in Europe, which includes British farmers and British Sugar as an organisation, to compete with the less efficient producers in Europe. He referred to the fact that we only produce 50 per cent. of our requirement in this country. Traditionally, we have imported the other 50 per cent. from the African, Caribbean and Pacific countries, which puts our market roughly in balance. There is no reason why our sugar beet industry should be forced to take unnecessary quota cuts if those cuts are not first imposed on those responsible for the surpluses that are dumped on the world market.
	I was extremely disappointed, and I believe that the whole sugar beet industry will have been disappointed, that when I asked the Secretary of State in the House last Thursday whether she would stand up for British sugar producers and oppose the change in the mechanism that the Commission has proposedwhich would mean that quota cuts would hit British farmers unfairly, instead of attacking those who produce the surplus she categorically refused to confirm that the Government would resist those proposals. That was a derogation of responsibility for the British industry.

Gillian Shephard: rose

David Heath: rose

James Paice: I will give way first to the hon. Member for Somerton and Frome (Mr. Heath).

David Heath: The hon. Gentleman is extremely fair. He knows that I and many other Members who represent dairy farming areas have spoken repeatedly about the difficulties that dairy farmers face and the loss of profitability. I had thought that he entirely agreed on that, and I think that he has indicated that he does. I am surprised, however, to read that one of the proposals in the Conservative party's James review is to recover the entire costs of the Rural Payments Agency from hard-pressed farmers. How will that help dairy farmers in my constituency?

James Paice: I am not often fair to Liberals, and perhaps that will teach me a lesson for being so. The short answer is that the hon. Gentleman has misunderstood the proposal in the James review, which is that the whole of the Rural Payments Agency should be outsourced. The responsibility for managing the whole framework of payments is ridiculously expensive and complicated, and I shall refer later to the bureaucracy that is now involved. That needs to be outsourced, and it will be.

Gillian Shephard: I had thought that my hon. Friend was going to be fair to everyone else, and now he is just being fair to me, for which I am grateful. I want to refer back to his remarks on sugar. It is one thing, of course, for the Government, as the Secretary of State apparently did in the House last week, to stand by while the sugar industry goes to wrack and ruin, but it is quite another not to plan some kind of strategy for the future of those farmers who, in the past, have successfully grown sugar beet. Will my hon. Friend comment on what might be put in place so that the land could still be farmed and people still profitably produce a crop, in the light of the Government's total inaction?

James Paice: Yes, my right hon. Friend is absolutely right to stand up for sugar producers in her constituency and across the country. It is a very important crop, both in rotational terms, for example biodiversity, and, as I said earlier, in relation to food security. What we must do is reform the sugar regime to allow, wherever possible, the less developed and ACP countries to continue to send their sugar into the European market at a slightly higher price than they would otherwise get on the world marketor there is no advantage to them in doing sobut at the same time allow our producers to continue if they are efficient enough to do so.
	We all accept that there must be an element of price cutting, although nothing like the percentage originally proposed by the Commission. That would mean a number of producers going out of business, particularly in some of the high-cost European countries. The Commission should be working with those countries on a restructuring programme to remove their quotas from the system. If the sugar quotas of the high-cost producing countries were cancelled, the need for any further quota cuts would diminish dramatically. If cuts are needed they should, as I said earlier, be imposed on those responsible for the surpluses that are being dumped on the world market and are destroying the sugar trade for other producers. I hope that that is helpful to my right hon. Friend.

Lindsay Hoyle: Obviously, the hon. Gentleman is rightdairy farmers are struggling all over the country. Part of the problem is that a fair price is not being paid by the supermarkets. The processors are holding the price down, and it is continually being pushed down. That is a major barrier to the success of the dairy industry. What we should be doing is seeking a way to ensure a fair farm-gate price, which would enable the dairy industry to survive. I remind Ministers that we should have more meetings with supermarket representatives and put more pressure on them. Does the hon. Gentleman agree with that?

James Paice: I have a lot of sympathy with that, but I hope the hon. Gentleman will forgive me if I do not go into much detail now because I want to deal with the whole issue of supermarkets later.

Paddy Tipping: The hon. Gentleman mentioned the James review. Will he confirm that it recommends cuts of 894 million in the DEFRA budget, 112 million in the Rural Payments Agency budgetthat cannot be achieved merely by outsourcingand 47 million in the Environment Agency's budget, when we ought to be cleaning up the environment and tackling pollution? Those are big cuts that will affect front-line services. The hon. Gentleman has got a cheek calling for this debate today.

James Paice: What the Government seem to have completely overlooked in the James reportprobably intentionallyis that it is not just about cutting bureaucracy, although that is critical. It issues a challenge: it asks whether Government are doing things that Government should not be doing, and whether by doing those things they are imposing extra costs on farmers and every other sector of society.
	The hon. Gentleman mentioned the Environment Agency. I know that he takes an interest in such matters. He should go and talk to all the farmers in his constituency who are constantly afflicted by inspectors for this, that and the other, many of them from the Environment Agency, imposing new rules and regulations that will not actually help to improve the environment. The hon. Gentleman and I agree about the need to do everything possible to improve the environment, but that causes unnecessary extra cost, which is what we are trying to weed out of the system.

Geoffrey Clifton-Brown: Will my hon. Friend give way?

James Paice: I hope that my hon. Friend will allow me to make a little more progress.
	Behind all the failings that I have described has been a very regrettable attitude from the Government. My hon. Friend the Member for Ryedale mentioned food security, which is perhaps best put in context by a statement issued by DEFRA at the time of the 2003 royal show. DEFRA said
	National food security is neither necessary nor is it desirable.
	That, I think, underlines the absence of Government thought processes when it comes to the importance of farming and food production.
	It is not just a case of the direct farming issues that the Government have neglected and the damage that they have caused to the countryside. The motion refers to other issues, including the erosion of the green belt and the absorption of villages into our conurbations, while the Deputy Prime Minister's proposals could mean the building of another 1.2 million houses on our greenfield sites. Some 58 per cent. of rural households have no regular bus service, and bus journeys outside London have declined. Our woods and forests and our timber industry have also declined. Funding for private woodlands stands at just over 18 million, compared with more than 300 million for state sector woodlands.

Mark Todd: Will the hon. Gentleman give way?

James Paice: In a moment.
	The Government are obsessed with wind power as the sole source of renewable energy, even though it would leave a huge environmental footprint on the countryside. Yet they have done virtually nothing to promote the real contribution that the countryside could make to renewable energy through biofuels and biomass. The 20p per litre reduction in duty on biofuels is simply not enough to trigger the industry, notwithstanding the Government's commitment to achieving 0.3 per cent. of fuel from renewable resources this year. That figure has to be increased or supplemented by a renewables obligation. On biomass, there has been a deafening silence for the past seven yearsuntil the setting up of a taskforce just two months ago.

Geoffrey Clifton-Brown: rose

Henry Bellingham: rose

Mark Todd: rose

James Paice: I give way first to the hon. Member for South Derbyshire (Mr. Todd).

Mark Todd: The hon. Gentleman and I have talked many times about rural issues, and he will concede that we often agree on them. He mentioned bus services in rural areas. In South Derbyshire in 1997, 17,000 passengers were carried on community transport, which in essence serves the rural parts of my area; now, 72,000 are carried. Perhaps that experience is reflected more widely, or perhaps my area is unique.

James Paice: That is not reflected more widely. I shall not dispute the figures for the hon. Gentleman's constituency as one would expect him to know better than others about such matters, although that is not always true of certain Members. The national statistics clearly show a considerable decline in the overall distance travelled by buses and in the number of passenger miles travelled outside London.

Geoffrey Clifton-Brown: I declare my interest in this subject, as listed in the register. Does my hon. Friend agree that part of the problem in farming today is DEFRA Ministers' lack of understanding of how the industry works? They have come up with one of the most complicated schemes that could possibly be imagined for the single farm paymentthe historical and regional systems mixed togetherand they have still to come up with the final details. Yet crops need to be planted urgently, within the next few weeks.

James Paice: My hon. Friend is entirely right and I hope to discuss that issue in due course.

Henry Bellingham: Is my hon. Friend aware that British Sugar has put in a planning application for a bioethanol plant to be installed in the beet factory in the constituency of my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard)? British Sugar has made it clear that if the duty differential were more favourable and sensible, it would make such planning applications in respect of all its factories.

James Paice: I am grateful to my hon. Friend for reminding me that, as he rightly says, British Sugar has put in a planning application for a bioethanol plant. However, it has made it clear in public statements that such applications are dependent on further Government action to ensure viability as far as possible. As I said earlier, the simple 20p duty reduction is not enough on its own. Further surety is needed and the Government have more than one option: another duty reduction or the introduction of a renewables obligation on fuel retailers. If we are to develop bioethanol and, even more urgently, the biodiesel sector, which is wide open to exploitation if the market can be created, we need to be certain that such a market will exist in a few years' time, not just tomorrow.
	In the past seven years, we have witnessed a catalogue of neglect of, and disdain for, our rural communities and values, as my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) suggested. Yet now the countryside faces its biggest economic change since 1947. Let me make it absolutely clear that the Opposition entirely endorse the principle of decoupling support from production, but very few peoplebe they farmers, politicians or commentators, let alone the general publicfully appreciate the scale of the change taking place. As my hon. Friend has just said, the Government's introduction of the new arrangements has been a shambles. They have introduced an extremely complicated, hybrid scheme without really understanding the complexities of the situation. The entitlement rules have been trickled out over the past few weeks, right up to 1 January when the scheme commenced.
	Many of the rules are still unclear. For example, many farmers traditionally lease land for the growing of one crop, usually a root or other vegetable crop on a rotational basis, from different farmers. They still do not understand whether they get the entitlement or whether the farmer who owns the land gets it. It is likely that the entitlement will fall down the middle, because neither party will satisfy the 10-month occupancy rule. That is one example of the ridiculous and absurd situation that has arisen.
	Instead of a simple system of payments linked to the environment, we have a system that leaves some people farming without a payment and others not farming but receiving a payment. Only a Government ignorant of what farming business is really about could have introduced such a scheme.

David Drew: I admit that it is a spatchcock of a proposal, but the difficulties arose because even the NFU was greatly split over it, let alone the other farm organisations. It could be argued that the Government could have shown greater leadership, but the proposals were bound to upset someone. Does the hon. Gentleman agree that we have the best of what could have been proposed?

James Paice: The term a spatchcock of a proposal deserves to be put in bold capitals in Hansard. It sums up the situation. It is not the fact that we have a hybrid scheme that is the problemit is the fact that the Government announced it in March 2004 without any understanding of the complexities of sorting out who would be entitled to it and how it would work. Despite all that, they insisted on introducing the scheme on 1 January. They fundamentally misunderstood the task on which they had embarked and that is what has caused the shambles, the dismay and the distress felt by so many farmers.

Andrew George: I entirely agree with the hon. Gentleman's analysis that the competence of DEFRA is in question, given that it made an announcement without at the same time making clear its assessment of its impact. Nor did the Department properly lay out how it would overcome the obvious complexities involved in delivering the new scheme. What is the view of the Conservative party and which options, of those available to the Government, would it have chosen?

James Paice: The hon. Gentleman is not keeping up with the real world in which we live

Ian Liddell-Grainger: The hon. Gentleman is a Liberal Democrat.

James Paice: Well, I suppose it is hardly surprising, then.
	The fact is that the Government made their decision back in March and, like it or not, we are lumbered with it. That is the system that we are going to get. If the hon. Gentleman wants to ask me questions about what we would do, he must also say what the Liberal Democrats would do if, by some unbelievable circumstance, they were to be able to do something. As always, of course, the Liberal Democrats can say what they like because they know that they will never have to do it.

Kali Mountford: rose

James Paice: I will give way to the hon. Lady and then I will move on.

Kali Mountford: I am grateful to the hon. Gentleman for his generosity in giving way. I have listened carefully to his speech so far and am fascinated by it. However, will he now move on to such schemes as the rural bus partnership scheme, the rural train partnership scheme, the village renaissance scheme and the market towns initiative? Will he discuss village schools and other aspects of our rural communities?

James Paice: I intend to move on, and I am grateful to the hon. Lady for inviting me to do so.
	As a result of the complexity of the scheme that we have just discussed, it was widely believed that the Rural Payments Agency could not make any payments until well into 2006, despite the target of December 2005. We know now, because it was announced literally two or three hours ago by the agency, that that will be delayed until February 2006 at the earliest. That is a direct result of the complexity of the system that the Government introduced. We need a specific undertaking by the Government that those delays will be recognised and, if necessary, an interim payment made. The cash-flow implications for farmers of the 14-month delay originally envisaged between their last integrated administration and control scheme payment and their first single farm payment were bad enough. If the gap is going to be 16, 17, 18 months or more, the cash-flow implications are entirely unacceptable.
	Cross-compliance and what farmers have to do to receive payments are another feature of the new system. Farmers must obey a huge list of statutory requirements. That sounds fineof course people should obey statutory requirementsbut farmers will pay twice. They will pay the penalty for breaking the statutory requirement and they will also lose their single farm payment. The Minister must explain the justification for that double whammy. Perhaps the starkest example of the Government's gold plating of regulation is to be found in the rules on cross-compliance, including the rules on good agricultural and environmental condition. Annex IV of the European regulation defines good agricultural and environmental condition in just 13 short lines. The Government's statutory instrument consists of 700 lines. Last week, farmers received three books on cross-compliance, including 36 pages on soil management and 44 pages on habitat and landscape. That illustrates more than anything the Government's contempt for farmers and their complete failure to understand that farmers know far more about managing their land than Labour Ministers.
	What is going to happen now? It is widely believed that the reforms will result in a further fall in domestic production. That matters, because increasing imports of food have a damaging effect on the environment, both through global warming and through the destruction of local environments where food is produced. Equally important, we face massive increases in world demand for food because of population growth and prosperity, which will result in an estimated 50 per cent. increase in grain demand by 2025. In the short term, there is a risk of disease, and we have already seen how avian flu in south-east Asia has suddenly removed supplies of poultry meat from our market.
	The Government do not seem to care. They have not made any assessment of how much production will fall or what will happen to our land when it is taken out of production. How much of our food manufacturing industry will move abroad if raw material is not produced here? That sector employs another 500,000 people. Some people estimate that hundreds of thousands of acres of grass will not be cut or grazed. No doubt, the Government will point to the entry level scheme, which is fine as far as it goes. However, 30 per hectare will barely cover the costs. Ministers say that the scheme requirements are little more than things that most farmers have been doing anyway. They are right, but farmers have being doing those things as part of profitable farming. If there is no profit in farming and no margin in ELS payments, they will not be done.

Geoffrey Clifton-Brown: My hon. Friend is quite rightwe should produce food in this country. However, we have one of the worst balance of payments records that we have ever had. In the dairy sector alone we have a 700 million deficit. Is that not a disgrace, as we could produce that food ourselves?

James Paice: It is indeed. I shall take one more intervention and then I shall move on to that very point.

David Burnside: I hope that the hon. Gentleman will cover in his speech the greatest capital cost to be borne by farmers over the next yearthe implementation of the nitrates directive. In Northern Ireland alone, for 22,000 farmers managing 32,000 farms it will cost 237 million, with only 30 million available through the farm waste management scheme. That massive capital cost will be imposed on farmers throughout the United Kingdom during the next year. What will the Conservative party recommend that the Government do, or what will the Conservatives do if they are in power to alleviate that massive capital cost to our farming communities?

James Paice: I was not intending to refer to the nitrates directive, simply because there are so many things that I want to mention, but the hon. Gentleman is right to raise that point. It is another huge imposition on farmers. The answer is clear: we must press for much longer derogations from the directive and ensure that its implementation does not cause the massive capital cost to which he refers. That relates to my overall point about the gold-plating of regulations.
	We need a real vision of what we want from our farming industry and of what we expect in the countryside, but that vision is woefully absent from the Government. In contrast, the Conservatives believe that domestic food production is important and that our rural environment is best cared for by working with the farmers who occupy it. As a result of the changes, some farmers may decide to stop farming and others will refocus their business on leisure, but for those who continue the most important feature of change is the need to get nearer the market and to produce for the customer. For some, that will mean direct sales to the consumer, and for others it will mean adding value either individually or co-operativelybut for all of them it means being able to compete. British agriculture cannot continue to carry the superstructure of regulatory cost that it has borne in the past. Nor can it compete with producers who do not face those regulations.
	What is the point of our egg industry becoming salmonella-free if we then import Spanish eggs stuffed full of the disease? What is the point of encouraging farmers markets if our abattoirs are being forced to close because of red tape? Last week, I visited a butcher who has his own small slaughterhouseexactly the sort of enterprise that we all, on both sides of the House, want to support. He is licensed to kill, cut and retail meat, but if the animal belongs to someone elseperhaps another farmerwho wants to sell the meat at a farmers market, he is not allowed to kill and cut the beast, even though it would be going through exactly the same process as the meat he sells in his shop. A Minister with any real concern, and who wanted farmers markets to develop, would sort out such an absurdity.
	What was the point of our healthy livestock being slaughtered during the foot and mouth epidemic when the Government do nothing to stop the illegal importation of perhaps 11,000 tonnes of meat, 200 kg of which even DEFRA accepts may be infected with the disease?
	What about food labelling and the deceit that allows, for example, pigmeat grown abroad to be labelled British because it is sliced in this country, or that allows food to be labelled organic even if it is not produced to British organic standards? The Government have repeatedly refused to change the law, but we will not just for farmers, but for consumers. We are not advocating trade barriers, but when we import food that is produced using methods that are banned in this country, the consumer has a right to know. Our farmers could then exploit our higher environmental and welfare standards, but without honest labelling they are operating with one hand tied behind their backs.
	Market strength is also an issue. As we have heard already, many farmers complain about the power of the supermarkets. We must face up to the fact that supermarkets have provided a massive increase in the diversity of food available to the consumerof course, that is in all our interestsbut they dominate the buying chain. For example, 65 per cent. of liquid milk is sold by supermarkets. Clearly, the code of practice is not worth the paper that it is written on. It needs to be much tougher and transparent. The Office of Fair Trading is carrying out an auditit would be wrong to presume its conclusions, which I await with interestbut, clearly, the present situation is entirely unacceptable.
	Farmers need to work together. There is a need to change both the corporate and tax treatment of our farm co-operatives to enable them to become more effective and to make vertical integration possible, but even that is of little help if co-operatives are not allowed to become the serious players that they are not only elsewhere in Europe, but in the United States, Canada, Australia and New Zealand. All the other countries that advocate the free market allow their co-operatives to grow and become serious players in the industry. The Government's forcible break-up of Milk Marque has placed a large black cloud over the future of the co-operatives' ability to represent farmers' interests in the marketplace.
	The countryside has many functions. It is home to 23 per cent. of our people. It produces 64 per cent. of all our food. It is the landscape that attracts millions of visitors each yeara landscape that has evolved over the centuries, much of it as a result of past farming practice. The people who live there have many interests and many careers, but they are being short-changed by the Government. They receive lower levels of service, fewer buses, fewer police officers and less standard spending assessment funding than their urban counterparts.
	Agriculture is at the centre of our rural communities and it is far more important than its contribution to our gross domestic product suggests. It underpins many other rural businesses and much of our rural tourism, as well, of course, as the whole food industry. The Conservative party believes that agriculture can have a prosperous future producing food and energy crops, while caring for and constantly improving our rural environment.
	Rural areas can again become thriving places to do business, rather than just dormitories, but they need a Government who have an instinctive understanding of rural life and of the interaction between its many parts, rather than a Government who impose their urban views. The Labour Government have shown that they cannot provide thatwe can and we will.

Alun Michael: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	welcomes the Government's commitment to farming and rural communities set out in the Strategy for Sustainable Farming and Food and Rural Strategy 2004; applauds the Government's commitment to invest more than 500 million over three years in sustainable food and farming; commends the reforms of the Common Agricultural Policy secured by the Government in June 2003, which will be implemented at the earliest possible opportunity in 2005; congratulates the Government's record on public service delivery in rural areas; further commends the 239 million allocated over six years to 200304 through the Rural Bus Subsidy Grant for new and improved rural transport services; further applauds the increase in the resources available for regional development agencies to regenerate the rural economy; further welcomes schemes in place to provide affordable housing in rural areas; praises the efforts to retain the rural post office network; further congratulates the Government's action to protect and enhance the rural environment; and calls upon the Government to continue pursuing a strategy based on long term policies to regenerate British agriculture, improve rural services and revitalise the rural economy as a whole.
	Today's debate gives us an opportunity to rebut the doom and gloom purveyed by the Conservative party. The future of our rural and farming communities is enormously important for this country, and this is a timely opportunity to remind the House of the considerable progress that we have made since 1997 in ensuring that those communities have a sustainable futurea future that would be taken from them if the cuts envisaged by the Conservative party were made.
	The current CAP reformthe most significant change in the subsidy regime for 30 yearspresents real opportunities for farming. Our economists estimate that, on average, farm incomes could rise by about 100 million relative to what would happen in the absence of the single payment scheme. Current farm incomes have shown welcome signs of recovery in the past four years and are now 80 per cent. above the low point in 2000.
	It is clear from the opening speech that the Conservatives want to return to subsidised farming, instead of developing the sustainable future for farming that we are helping to bring about. The Conservative threat to the rural economy is spelt out in the James report. The Opposition propose a massive cut of 112 million in the budget of the Rural Payments Agency by 200708, just when the agency is about to deliver the new single farm payment. How much good will that do for farmers? As the RPA made clear today, it hopes to make the single farm payments in February 2006. Our promise is that that will be done as early as possible in the payment window. Of course, payments depend on a complex IT system, whose delivery timing depends on when the fully detailed information comes from European Commission. There is now massive investment in the streamlined system, and in following years farmers will get their payments at the earliest date within the payment window. The cuts envisaged by the Conservative partyit is not just outsourcing, so let us have none of that nonsensewould wreck the programme that is being designed and delivered in partnership with farming organisations.
	The Conservatives want to save 47 million in the Environment Agency, but that would severely hamper its work to support businesses, especially small and medium-sized businesses, in acting against illegal polluters, such as fly-tippers, and pursuing deregulatory measures. Barbara Young, the agency's chief executive, made those points clear yesterday.
	The figures keep changing in the drip feed of the James report, but the Conservatives must answer two questions, although the hon. Member for South-East Cambridgeshire (Mr. Paice) failed to do so in response to hon. Members' interventions. First, how can they claim to care about farming and rural areas if they are prepared to slash services, as the James report recommends? Secondly, how have they done their sums? Let us have chapter and verse on how they have worked out their figures. What do they intend to cut, and from where? We know only the total figures, which appear to be ill judged and dangerously threatening to the countryside. Such information is even not detailed on their website, and the hon. Gentleman could not answer those questions when he took interventions. Let us hear from Opposition Front Benchers exactly where the cuts will fall, or they will stand condemned by their silence. Our farmers need to know.

David Taylor: Does the Minister intend to deal with the future of the Food Standards Agency under the proposed cuts? The scale of its activities would be halved, which would have a serious consequential effect on public health and almost certainly a knock-on effect on international confidence in the quality of British food.

Alun Michael: My hon. Friend makes an important point. The Conservative party is dangerously slack in its approach to not only farming, the rural economy and the environment but the health of the nation.
	Let us get the facts straight about the rural economy. It is vital that we do not confuse rural communities with farming communities. Farming remains at the heart of many communities, but it is by no means the dominant economic activity in the countryside, and we must keep that in perspective.
	The majority of rural England is thriving. It is true that unemployment has fallen by 24 per cent. in urban areas since 1997, but it has fallen by 26 per cent. in rural areas. Rural communities generally are benefiting from the same economic prosperity as urban communities, with low unemployment and interest ratesthe lowest for 40 yearsand real growth of nearly 3 per cent. a year since 1997. The rural economy has benefited from our national economic success, not least because businesses of all types increasingly feature in rural as well as urban areas. Employees in our rural areas are more likely to work in sectors other than farming. Some 17 per cent. work in manufacturing, some 15 per cent. work in wholesale and retail, and some 9 per cent. work in hotels and restaurants, while only 7 per cent. work in farming.
	Farming is now well placed to respond to the changes that it faces. Through the strategy for sustainable farming and food, the industry, consumers and the Government are working together to help farming to increase its competitiveness and reconnect with the market. I shall return to farming issues in a moment.
	Rural services have been enhanced since 1997 due to the Government's concerted action. Let me give a few examples. The number of schools closing in rural areas was running at 30 a year between 1993 and 1997, but that has come down to an average of six a year since 1997. We are supporting more than 2,000 bus services a year through the rural bus subsidy grant. Such support would be slashed under the Conservatives, yet they have the cheek to talk about fewer buses. We are providing 150 million a year to support the rural post office network, so the number of closures has fallen from more than 300 a year to about 100 a year. As we promised, there are now more than 100 primary care one-stop or mobile units providing care to people in rural areas.
	We are neither satisfied nor complacent because many rural communities face real challenges and problems. Farmers are not having an easy timeI shall address some of the problems in a momentbut let us debate these real issues on the basis of evidence, rather than myth and misrepresentation, which was all that we heard from the hon. Member for South-East Cambridgeshire.

Ian Liddell-Grainger: The Minister is aware that many of the jobs being created in the countryside are seasonal with a very low cost base. That is what is happening in places such as Exmoor. Does he not understand that we are looking for a long-term commitment and long-term jobs, not seasonal jobs?

Alun Michael: The hon. Gentleman is wrong. There are low-paid jobs in urban and rural areas, but the Government's success in delivering broadband access to rural areas is giving a wide range of businesses that previously could operate only in urban areas the opportunity to operate in rural areas. That is happening because there are many intelligent entrepreneurs in rural communitiesmen and many women who are opening the sort of business that has never before been seen in rural areas. I say to the hon. Gentleman, with great respect, that he has not connected with the type of change that is occurring in our rural areas.

Lindsay Hoyle: Is it fair to say that the rural economy has benefited from the minimum wage, without which there would have been a lot of poverty in rural areas? It was the Labour Government who took that brave stance.

Alun Michael: My hon. Friend is absolutely right. In addition, the working families tax credit has helped people in rural areas. There is a problem of low pay in such areas, but if the Labour Government are removed and a Conservative Government arrive, my God, it will affect the low paid and the unemployed in rural areas, and many now in employment will be unemployed.

Andrew Turner: Will the Minister address a specific issue affecting livestock producersthe disposal of fallen stock? Livestock producers in my constituency face a difficulty in that only one organisation tendered to dispose of fallen stock under the Government's fallen stock schemethe Isle of Wight Foxhounds. As I am sure he is aware, that group is likely to have far less income after 19 February and it will therefore be unable to continue to cross-subsidise the disposal of fallen stock. No other organisation is willing to dispose of fallen stock on the Isle of Wight. What reassurance can the right hon. Gentleman give farmers in my constituency on that important matter?

Alun Michael: We are aware of the specific fallen stock issue on the Isle of Wight and we are addressing it. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Exeter (Mr. Bradshaw), might have more to say when he winds up the debate.

James Gray: The Minister is enjoying himself at the Dispatch Box. Before he moves on from the minimum wage, will he tell us whether he would abolish the agricultural wages boards, as we propose under the James report?

Alun Michael: Certainly not. We believe that the AWBs continue to support the wages of agricultural workers, and I am sure that all of them will take note of the threat to their income that the hon. Gentleman offers.

Kali Mountford: A year ago in one ward in my area, the lowest wage was 18,000 a year and the highest was 30,000; now, the lowest is 22,000 and the highest is 35,000. Our economy is growing, but we want to be able to plan the local economy. We are working with the local regional development agency, Yorkshire Forward, on a market towns initiative. Are there any plans to give further support to such initiatives, so that rural communities such as mine can have planned development?

Alun Michael: Yes, indeed, there are. Following on from the announcement made in July by my right hon. Friend the Secretary of State, we are massively increasing the money that we put into RDAs and devolving finances to them, so that they can work with partners in their region and drill down to local areas, particularly rural areas, to support initiatives that we believe will create not only a healthy economywe already have that in rural areasbut a vibrant one.

Adrian Flook: Earlier, the Minister defended Government spending as though it were a sacred cow, yet in the next few years his Government will spend 1 billion and more on culling cattle that have bovine tuberculosis. Why does he not accept that he will fail Somerset's dairy and cattle farmers in the coming years by not resolving the problem of bovine TB?

Alun Michael: We want to spend less and waste less money on unproductive measures. My hon. Friend the Under-Secretary of State will pick up on that point, which comes within his portfolio, in his winding-up speech.
	I want to make one point clear for the Opposition, because it is about time they got in touch with reality. They portray people in rural areas as being not only disadvantaged but dissatisfied, yet the facts tell a different story. When we asked rural people whether they were content with services in rural areas, more than 90 per cent. said they were satisfied with their GPs, NHS dentists, opticians and pharmacists; 79 per cent. were satisfied with the quality of education provided locally; 85 per cent. were satisfied with the location of bus stops and train stations; and 85 per cent. were satisfied with the quality of child care offered. We can hardly argue with what the rural publicour customerstell us. Opposition Members seem to talk to each other. The satisfaction expressed by rural people is the result of 180 Labour MPs doing so well in representing rural and semi-rural communities, or perhaps I should say that that figure is now 181.
	Let me outline some of the key steps that the Government are taking to address the issues facing farming and rural communities. My right hon. Friend the Secretary of State outlined to the House her vision of sustainable rural communities and a fair deal for rural England when she launched the rural strategy 2004 on 21 July. Sustainable rural communities, and in particular affordable housing, are at the heart of our five-year strategy, because it has been raised with us by Labour Members who represent rural communities. I shall come to housing later.
	The rural strategy encompasses all three pillars of sustainable development. First, it is about economic regeneration in rural areas. To help farm and other rural businesses be competitive and diversify, the Government are allocating an extra 2 million this year to improve business advice. We are also increasing the amount of money from DEFRA in the regional development agencies' finances from 46 million to 77 million next year.
	Secondly, the strategy is designed to tackle rural social exclusion wherever it occurs and to provide fair access to services and opportunities for rural people. We are pushing more of our money down to the community to help communities have a place to meet, an effective representative body such as a parish council, and access to a community development worker. Thirdly, the strategy is about protecting and enhancing the natural environment. We are creating an integrated agency to address the natural environment, biodiversity and our landscape in a co-ordinated way so as to get maximum social and economic advantage from its work, as well as benefits in terms of conservation and biodiversity.
	Whitehall does not always know best, so we are devolving decisions and funding closer to the peoplethe public, the customer, the community. Last October we launched a series of rural pathfinders across the country to pilot innovative ways of joining up service delivery at the local level, with local authorities taking the lead role. That counts: it matters to people. Yesterday I met representatives of the rural pathfinders from every region of England, and the enthusiasm with which they are responding to the opportunity is palpable.

Paul Tyler: Does the right hon. Gentleman recall that Ministers believed that Whitehall knew best in the matter of right to buy? When the Conservatives were in power they forced rural local authorities to sell their council houses. Will the Minister produce some action, rather than words, on the matter by enabling planning authorities in areas such as mine in Cornwall to constrain the amount of housing stock that goes into the second homes market by planning control?

Alun Michael: Indeed, in the planning field we are helping rural housing authorities and those who are concerned to provide housing and to make sure that it is sustainable, not just a house for the short term. I will return to the matter.
	I mentioned the enthusiasm about rural pathfinders in every region of England. It is also important to note that we are carrying out a major streamlining of our funding stream, from over 100 separate streams of funding to three broad funding programmes. That will make it simpler for everybody. To test whether the new arrangements are making a difference and to promote best practice, the Government are setting up the New Countryside Agency, whose role will be to assess how much impact Government policy and action are having. It will focus particularly on disadvantage and provide a powerful independent voice for rural people, advising Government, collecting views and experience across the regions and helping us to drive up quality and delivery at the local level.
	It is interesting to note some of the issues that the Opposition did not raise. It is important to get the facts about crime in rural areas straight. Crime across the United Kingdom has fallen by 30 per cent. since 1997, and that is one of the Government's biggest achievements. People in rural areas are much less likely to experience burglary and vehicle-related theft, and rural adults are much less likely to suffer from violent crime than their non-rural counterparts.
	Furthermore, fear of crime has remained considerably lower in rural areas than it is in urban areas. The British crime survey clearly shows that anxiety and worry about crime is less in rural areas compared with urban and inner-city areas, but we recognise that crime and the fear of crime continue to be a major concern for many people in rural communities. Only yesterday in the Standing Committee on the Clean Neighbourhoods and Environment Bill we agreed clause 1, which embeds environmental damage into the work of the local crime and disorder reduction partnerships. The Conservatives are so out of touch that they think that graffiti, litter and fly-tipping are urban problems that do not matter in rural communities. They are wrong.

James Paice: Who said that?

Alun Michael: Has the hon. Gentleman not read the Opposition's reasonedor rather, unreasonedamendment last week in which, in opposing the introduction of the Clean Neighbourhoods and Environment Bill, they said that the Bill focuses predominantly on urban issues while neglecting rural areas: their mistake, not ours.

Paddy Tipping: Clearly, the Opposition have forgotten. I need not remind my right hon. Friend that there were just two contributions from the Conservative Benches, neither of which addressed not only environmental crime but the equally important issue of animal welfare.

Alun Michael: My hon. Friend is absolutely right, and his was one of the 18 excellent contributions that we heard from Labour Back Benchers. In contrast to the Opposition, which is interested only in slash and burn in public services, the Government recognise the different needs of rural and urban communities. The rural policing fund has therefore been maintained for 200506 at 30 million, and I am pleased about that, not just as the Minister with responsibility for rural affairs, but because as a Home Office Minister I commissioned the research that led to that money, which addresses the particular needs of the 31 forces with the most widespread populations.
	When listening to rural residents, one theme dominatesthe need for affordable housing that will allow their children, and people with a connection to the area, to stay in their community. The hon. Member for North Cornwall (Mr. Tyler), who intervened on that point, was absolutely right, as are those of my hon. Friends who have raised the matter time and again. The Government have responded to that call through a number of measures. Before Christmas we announced specific measures to help local planning authorities allocate sites in villages for 100 per cent. affordable housing. That complements the rural exception site policy, which will be continued and which allows affordable housing to be built on sites that would otherwise not be available for development.
	Through the Housing Corporation's rural programme we are funding sites that would otherwise not be available for development. Our target is 3,500 homes for the two years from 200405, but we are on target to exceed that number by producing over 4,000 affordable homes in rural areas.
	But providing sites is only part of the story. In 2003 and through the Housing Act 2004, we introduced measures that retain a supply of affordable housing in rural areas by placing restrictions on the right to buy. In many villages where the supply of new social housing is limited, exercising this right has led to a diminished pool of affordable housing, and there are some who have exploited the scheme by selling on quickly to people with no local connections. That addresses precisely the point made by the hon. Member for North Cornwall. Hence, we introduced restrictions on the resale of right to buy homes in the seven national parks, the 37 areas of outstanding natural beauty and the 35 areas designated as rural for this purpose.
	In addition, my right hon. Friend the Deputy Prime Minister recently gave local authorities scope to reduce the council tax discount on second homes from 50 per cent. to a minimum of 10 per cent. Authorities can use this money for affordable housing or for other services in line with local priorities. In Devon, for example, this income is being used to build more affordable housing where it is needed in rural areas. These are real measures helping real people. My own belief is that shared equity is the model that we should support and encourage with as much enthusiasm as possible, because such models of co-operative housing provide the opportunity for people to benefit from affordable housing and to get on the first step of the ladder of ownership, and allows that unit of affordable housing to be recycled to the next family that needs assistance.

Ian Liddell-Grainger: The Minister is aware that North Yorkshire national park made an announcement on the subject a couple of days ago, and Exmoor national park has been examining the issue for some time. If the national parks go down that route, will the Minister look to support their aspiration to keep low-cost housing for local people, and will the Government put a bit of backbone into the policy?

Alun Michael: We will certainly examine the details of the national parks' proposals, and I am delighted that they are engaging with the issue, which, as the hon. Gentleman knows, is an important matter in our national parks, as it is in many other rural communities. The issue is important in the national parks because of the need to limit developments that damage the local environment. It is possible to go too far, and we must examine the detail of the proposals, but I am happy publicly to encourage the engagement of national park authorities with the issue.

Huw Edwards: Will my right hon. Friend commend the shared equity scheme introduced by Lovells, the private house developers, in conjunction with Gwerin housing association? I welcomed the first tenants to use that scheme in Monmouth. Does the Minister think that such a model could be applied to rural areas as well as to small towns?

Alun Michael: I note my hon. Friend's point. I am not aware of that specific scheme and would like to hear more about it. It sounds like the sort of scheme that we should encourage.
	Turning to farming, the strategy for sustainable farming and food remains our key policy. It is a comprehensive, long-term plan for the future development of the industry. It identifies how we can all work together to help farming to improve its economic performance and individual farmers to access the right training and advice for them, and to improve farming's impact on the environment. It is designed to support the farming industry through the current period of change and leave it well equipped to succeed in the future. The UK farming industry has a major role to play in meeting this country's food requirements, providing an attractive, well-managed countryside and contributing to the rural fabric, and we want a viable and sustainable farming industry that can do that.
	The implementation of the strategy is underpinned by our approach to the groundbreaking deal on common agricultural policy reform in June 2003, which committed us to seeking the best and the most sustainable approach to farming not only in England, but in the UK generally. Decouplingbreaking the link between production and subsidiesis the main prize from the CAP reforms, and it will allow the industry to shape its own future. In other words, the industry will depend on its own initiatives rather than on the Government.
	The real benefits that farmers can gain is why the new system will be delivered this year, which is the earliest possible date. The reforms and the delivery arrangements, which are based on a flat-rate area system, will help to reconnect farmers to their markets and will be free of many of the bureaucratic rules associated with production-linked subsidies, benefiting not only farmers and consumers but society as a whole.
	Overall, the CAP reforms will deliver significant economic benefits to not only farmers, but everyone in the UK. The benefits are estimated at 400 million to 500 million a year at present exchange rates. Payments under the new single payment scheme will depend on meeting a number of environmental, animal health and welfare and food safety standards. Those measures are expected to improve the environmental performance of British agriculture. In addition, we have decided to introduce an additional rate of national modulation in England, which will provide additional funds for agri-environment schemes and, by protecting the countryside and its environment, a more sustainable farming industry.
	We have adopted cross-compliance measures, which contain a mixture of common-sense farming practices and support for existing legislation, to bring all farmers up to the same minimum level. In addition to pillar 1 of the CAP, we are putting in 1.7 billion through the England rural development programme over the period 200006. Help is being provided on a variety of matters, including diversification, skills training and marketing. That means that we are making available 240 million a year compared with 56 million a year between 1993 and 1999, which is a fourfold increase in support.

David Kidney: On red tape, which was mentioned by the Opposition spokesman, does not it follow that with one single farm payment there is one single system for applying for forms and one single system for inspecting farms? Is not that better than the 10 or so schemes that we had before?

Alun Michael: My hon. Friend is rightI am certain that that improvement will indeed benefit farmers.

Andrew George: rose

Alun Michael: I will give way to the hon. Gentleman, then I must conclude.

Andrew George: The Minister will no doubt have noticed that under the Conservatives' proposals their changes in outsourcing the Rural Payments Agency will, according to the James review, be
	funded by a handling charge based on subsidies paid.
	Can the Minister reassure farmers who are anxious about late payment? Under the simplified system, if there is a late payment to farmers beyond 1 December this year, will farmers receive payments up-front where possible, and if it is not possible, will they be compensated for their loss of earnings as a result of delayed payment?

Alun Michael: Let me make it clear to the hon. Gentleman that we have said that we will pay as early as practicable within the payment window, which, as he knows, runs through to June of the following year. We want to bring the payments forward to the earliest possible point within the payment window. In the first year, that depends partly on the timing of information that comes from the European Commission. The hon. Gentleman, with his knowledge of the farming industry, knows full well how complex some of the delivery arrangements are. We try to make them as simple as possible for our farmers, but there are complications involved. The benefit will be our undertaking to make payments as early as possible within the payments window, which is not just for next year but for future years. We are in discussion with the industry, the banks and others to try to ensure that the situation is understood, and there is a promise to deliver. Farmers will know where they stand in the course of the coming months, well in advance of the December to June period. It is currently estimated that the payment will be made in February. It will be as early as we can possibly make it within the payment window, not only next year but in each successive year.
	Of all the rural issues, I turn finally to one that has been much debated in this Househunting with dogs. The Countryside Alliance, with Conservative Members following in its footsteps, has consistently misrepresented hunting as a town-versus-country issue, which it is not, and claimed that it shows that we are out of touch, which we are not. What I have said demonstrates the Government's achievements for the countryside. The facts speak for themselves.
	Let me set out the main points of what is in truth a minor issue for rural communities. Members of Parliament, having voted 10 times in 10 years for a ban on hunting

James Gray: The Minister seems to be fixated on hunting. Why is he talking about hunting when the motion does not refer to it, my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) did not mention it and it has not been raised at all during the debate? Why is he so fixated on banging on about it?

Alun Michael: Is the hon. Gentleman now embarrassed by his opposition to the Hunting Bill and his comments during its Second Reading? I turn to this issue particularly because Conservative Members have made a lot of song and dance about its impact on the rural economy. They have banged on about it time and again over many months. Indeed, the hon. Member for North Wiltshire (Mr. Gray) might like me to quote some of his comments. He said:
	There is no question but that the Bill will result in the deaths of perhaps 30,000, 40,000 or 50,000 dogs as soon as it comes in.
	He went on to say:
	The same applies to many horses. They can more easily be reused for hacking, but many lower-grade horses are kept exclusively for hunting.
	He also said,
	they are putting 8,000 people out of work.[Official Report, 15 September 2004; Vol. 424; c. 13651368.]
	In recent days, we have seen a statement from the Countryside Alliance indicating that we should not expect to see such a removal of dogs. Therefore, there is no threat to the people who are employed in that activity. It is interesting to see how that has disappeared from the agenda of Conservative Members.
	Having shot the fox of the hon. Member for North Wiltshire, clearly to his great embarrassment, I want to say that I am pleased that the debate has been on farming and rural communities. The priority is to make the best use of the money that is invested in agriculture to reform farming and give it a sustainable future. The problems will not be solved overnight but we are working on them with the industry, farmers and those who represent rural communities and business in our rural areas.
	Farming remains at the heart of many communities, despite being only part of the rural picture. We must balance our priorities for farming, for those who live in rural communities and for the nation. That is the Government's commitment and we will continue to deliver it.

Andrew George: I congratulate the hon. Member for South-East Cambridgeshire (Mr. Paice) on using precious time to debate an important subject that will affect many hon. Members. He raised some important issues in his presentation.
	I agree with the hon. Gentleman about many matters but I was somewhat disappointed, given the fanfare of publicity with which the Conservative party announced the James review, that he failed to answer a question from my hon. Friend the Member for Somerton and Frome (Mr. Heath). He asked why, if the Conservative party was so concerned about red tape and cost to the industry, overhead No. 63 in the James committee's main proposals about the Department for Environment, Food and Rural Affairs stated that a Conservative Government would deliver the outsourcing of the Rural Payments Agency,
	funded by a handling charge based on subsidies paid.
	That will clearly be a cost to the industry.

James Paice: Let me make it clear that that does not mean a charge on farmers, as the hon. Member for Somerton and Frome (Mr. Heath) implied. [Interruption.] I shall tell the Minister exactly where the money will come from. The outside agency will be paid a percentage of the total payment. At present, as the Minister knows, running the RPA costs 4 per cent. of the total payments. We believe that it can be done for half that amount. That money would go to the outside agency.

Andrew George: I am grateful for that clarification. If the charge is based on the company outsourcing, I am sure that farmers will be relieved. However, the proposal requires clarity. If we find from studying further Conservative announcements that that is genuinely the intention, we will welcome it.

David Kidney: The hon. Gentleman is performing a great service, because we ought to get to the bottom of the matter. I do not believe that the hon. Member for South-East Cambridgeshire (Mr. Paice) has provided a reassurance that we should accept. There would be a saving only because the taxpayer would stop paying for running the RPA. It is neither here nor there whether the total running cost is 4 per cent. or 2 per cent.a fraction of the amount of subsidies paid. The important question is who will foot the bill. The hon. Members for St. Ives (Andrew George) and for Somerton and Frome (Mr. Heath) discovered that the bill would pass to farmers, who will be flabbergasted by that, because the money would come out of their subsidy. They would get the money net of the payment instead of the total payment that they receive now.

Andrew George: I am worried that the reassurances that the hon. Member for South-East Cambridgeshire gave may unravel. That is why it is vital that the Conservatives make further clarifications and announcements. Perhaps they will try to clarify the issue further when winding up. At least they have taken on board the fact that there will be anxiety in the farming community if they propose such additional charges.

James Paice: I think that the hon. Gentleman accepts what I said earlier: there is no intention that the payment for the outside agency would come from the payments made to farmers. It is simply a question of reducing the totality of the cost of running the Rural Payments Agency, and we would pay the outside agency a percentage of the total, which is exactly how the RPA is funded at present. Farmers will not pay.

Andrew George: The hon. Gentleman says that I accept his earlier explanation. Of course, I do not accept everything that he says, because he earlier claimed that the Liberal Democrats were not in Government. Of course, we are in Government in Scotland, where we are implementing common agricultural policy reform. The Agriculture Minister, Ross Finnie MSP, is highly thought of in the farming community, and his implementation this year of the single farm payment north of the border is going ahead very steadily indeed. So the rather cheap remarks made by the hon. Member for South-East Cambridgeshire earlier were quite misplaced. Given that he is defending himself in this way, I worry that he doth protest too much. Perhaps, later on, we shall find out exactly what the Conservatives are proposing. Farmers will be concerned that their proposals would involve top-slicing the payments due to farmers, and I hope that we shall receive further clarification on that as the debate proceeds.
	We could spend time going over the Conservatives' pre-1997 record on farming, but it probably is not worth while doing so now. I have just put down a sheaf of papers containing reminders of BSE and of the fact that we have IACS forms twice as long as those of other European nations because the Conservatives were gold-plating directives in the UK. I hope to keep my contribution to the debate relatively short, because I know that many others wish to speak, and I want to cover issues relating to farming and to DEFRA's management of schemes. I also want to look at the impact of the power of supermarkets on the marketas the hon. Member for South-East Cambridgeshire rightly didand to follow up some of the Minister's remarks on affordable housing in the countryside. These issues are all important to people living in rural communities and to those involved in farming.
	I and others have expressed concern that DEFRA Ministers appear to act as managers, observers and bystanders in regard to what is happening in rural areas, and that whenever we want a clear vision of the Government's rural policy, we often find it out from Lord Haskins in another place. I am not alone in dubbing him the real Secretary of State, the one who is providing leadership and vision for the Department. However, when he comes out with controversial quotes such as
	Farms will get bigger, and that's a good thing,
	he rather undermines the Government's claim to be fighting for all farmers. It is inevitable that farms will get bigger over time, as they always have done, and that farmers will leave the industry, but the fact that that seems to be welcomed by the Government is a matter of concern to those involved in farming. Farmers have been leaving the industry at an astonishing rate, and since Labour came to power, they have been doing so at a higher rate than at any time since the second world war.

Ian Liddell-Grainger: The hon. Gentleman is making a valid point. That is certainly happening in Cornwall. People are selling up in London and elsewhere and buying an enormous amount of farmland. This is forcing farmers out because they cannot afford to pay for the land. Does the hon. Gentleman agree that the Government have not addressed this problem in any way?

Andrew George: I agree that there is such a trend in many parts of the country. Farmers, especially dairy farmers in my part of the country and the hon. Gentleman's part of the country, are leaving in droves. The Government's figures demonstrate that the number of dairy farmers has fallen from 37,300 in 1997 to below 25,000. Approximately a third of all dairy farmers have gone out of business since 1997, which is clearly a catastrophic change to the countryside. In many parts of the country, farmhouses are being sold, and a small piece of privatised green belt, if we want to call it that, is being bought with it, possibly for hobby farming. Often, if not always, a change of culture also happens.
	The nature of traditional farming communities is changing. The traditional farming community thatI remember, from my boyhood and upbringing in the far west of Cornwall, was one in which farmers were engaged in the local community and in which people could walk the land, irrespective of where local footpaths were. That was an interchange between the local community and farmers because they were very much one and the same. In many rural areas, a lot more private signs are being put up, with a lot more effort to try to redirect footpaths away from areas that have traditionally been walked in the past, as new people come in who do not understand country ways. That is sending shockwaves through many rural communities and causing unnecessary and unwelcome conflict in the countryside. I agree with the hon. Member for Bridgwater (Mr. Liddell-Grainger) on that point.
	The Minister rightly raised the issue of CAP reform. This is the biggest and most momentous challenge to rural communities. On balance, the Government made the right decision. Inevitably, we will have to move towards area payments at some stage, and the transitional approach taken by the Government gets the balance pretty much right. The decision taken north of the border, for example, was right for Scotland.
	It is important, however, that the CAP and single farm payments be delivered with greater transparency and simplicity. With that greater transparency, and perhaps with freedom of information, I predict that taxpayers and the general public will ask increasingly what benefit they are getting from the payments being made to farmers, given that they will be less complex.

James Gray: The hon. Gentleman has a charming way of being all things to all men, all the time, on almost every subject. A moment ago, he said that Ross Finnie was doing well in Scotland with historic payments, and now he says that the approach in England is also going well. Can I ask him one quick question? In the unlikely event that he were the Secretary of Statelet us imagine that for a moment, although I grant that it is not very likelywhat would a Liberal Government have done?

Andrew George: Perhaps the hon. Gentleman needs to go on a learning curve: devolution results inevitably in differing policy in different places. The decision taken for Scotland was therefore right for the Scottish situation and the Scottish farming industry. He asks about what I would do were I Secretary of State I think that he and I have about the same chance of becoming Secretary of State, and our chances are possibly greater than the Conservatives' chances, given their performance in the polls. I have already told the House that I think that the Government got the balance pretty much right. Certainly, over a seven to 10-year period, we need to move towards area payments. Clearly, in a 10 to 15-year period, it would be absurd and bizarre to find ourselves in a situation in which farmers were being paid on the basis of what they were doing 10 or 15 years previously, and they could be doing anything at that stage. There must be a transitional period. We must move in that direction and, inevitably, Scotland and Wales will have to do the samebut at their own pace, in their own way and on the basis that they make decisions at a time that suits them, rather than their being instructed by our Parliament.
	I want to remind the Minister of issues that have undermined the confidence with which the farming community views the Department. There is concern, which I think he has picked up, about the date when farmers will receive their payments under the single payments system. Confidence is not encouraged by the way in which the Government handled the release of Jim Dring's report on Burnside farm in Northumberland at the beginning of the foot and mouth epidemic in February 2001, or the way in which they handled video evidence that arrived in the public domain towards the end of last yearby the lack of knowledge of that evidence, and the fact that it was not involved in the various foot and mouth inquiries that the Government commissioned.
	Nor is the industry encouraged by the way in which the Government handled the regulations replacing the Animal By-Products Order 1999, failing to lay them before the House in 2003. They promised to implement a fallen-stock collection scheme in January 2004. Following further announcements, we were eventually presented with a scheme that is only just getting off the ground now, some 18 months after it was required to start. That too does not help.
	I said that I would say something about the power of the supermarkets. As the hon. Member for South-East Cambridgeshire pointed out, the supermarkets can dictate market conditions to farmers. Their actions, and those of their chief executives and buyers, are of course entirely rational: if they do not put pressure on their suppliers and their competitors do, they will be at a disadvantage. We need a code of practice that distinguishes clearly between appropriate use of power and inappropriate abuse of power in the market.
	The Government have not paid proper attention to that, although they have instituted inquiries. Since the first inquiry conducted by the Competition Commission in 2000, there have been others conducted by both the commission and the Office of Fair Trading. We are still awaiting the publication of the OFT's audit of the food supply chain, undertaken since the OFT reported on the operation of the supermarket code in February last year. The farming industry, however, wants action rather than further inquiries and reports. It wants a system with real teeth to ensure that farmers have a say, and can have an impact throughout the food chain.
	According to yesterday's Tesco report, over the Christmas period Tesco had 29 per cent. of the grocery market. When the OFT examined the role of convenience stores last year, it concluded that if there is a discrete market in convenience stores there will be a discrete market in supermarkets as well. That gives Tesco about 40 per cent. of the supermarket sectora much larger proportion of the market than was held by Milk Marque in 1999, a year before the Government decided to abolish it. At that stage, so far as we could tell, Milk Marque had some 29 per cent. of the market.

Lindsay Hoyle: There is clearly great concern within the farming industry about the way in which supermarkets react, and the hon. Gentleman is right: the problem is that when one supermarket drives the price down, its competitors have to continue to do so. What does he believe is the answer to ensuring fair play and a fair price at the gate for farmers, so that they can have a livelihood and make a profit? At the moment, that is not happening.

Andrew George: I entirely agree with the hon. Gentleman and we Liberal Democrats would deal with the problem by, for example, strengthening the code. Far too much emphasis is placed on the use of rather grey terminology, as evidenced in appearance of the word reasonable throughout the document. That is very good for lawyers and the courts, but the use of much more measurable language would help those using the system.
	The OFT's report of last February made it clear that farmers, farmers' co-operatives and suppliers are not using the code for fear of retaliation. We need a food trade inspectoroperating within the OFTto undertake in various sectors of the food supply chain the kind of proactive inquiries that the OFT currently undertakes, in order to identify and investigate malpractice, perhaps on the basis of information provided by the industry.

Geoffrey Clifton-Brown: I commend to the hon. Gentleman the supermarket Waitrose, which has direct contracts with British dairy farmers and beef producersindeed, it makes great play of such contractsso that its sources can be fully validated. If other supermarkets were to follow the same line, the British agricultural sector would do much better.

Andrew George: That is an interesting point. I have heard from all the main supermarkets and all claim that they are treating British farmers fairly. I do not mind the hon. Gentleman's using his intervention as a commercial for a particular grocer, and it is true that Waitrose has a good name in many circles in British farming. Even so, this is a major issue across the piece, and it needs to be tackled.

Huw Edwards: I have been following the hon. Gentleman's argument carefully and I commend the efforts that he and others have made to strengthen the supermarket code of conduct. Has he seen the recent report in the Farmers Guardian suggesting that the National Farmers Union, Farmers For Action and supermarkets such as Tesco are collaborating in order to get a 3p increase in the price of milk, half of which could be distributed to the producers and half to the processors? Does he commend such an initiative?

Andrew George: I certainly do. The last time Farmers For Action protested and erected blockades outside dairies and supermarkets, it achieved a 2p increase in the price given by Asda, at least, but as the hon. Gentleman well knows, it is questionable whether that benefit reached the farmers themselves. Moreover, one cannot simply establish and peg farm gate prices on the basis of protesting every six months or so; we have to have a system that is robust in the long term. That said, I entirely agree that the current farm gate price for milk is unsustainable for the majority of dairy farmers. Action is required to ensure that they are given fair protection in the market, which does not happen at the moment.
	I do not want to take up too much of Members' time, but before I finish I want to emphasise a couple of points about housing. I was concerned on behalf of many people living in rural areas following the publication last year of the Kate Barker review. It pointed out that, as the hon. Member for South-East Cambridgeshire argued, large swathes of the countryside could be swamped by many thousands of houses, the prices of which would be well out of the reach of people on rural incomes, and that there is a consequent need for affordable housing in such areas. However, such an observation does not help people living in the countryside. As long as green land in the countryside has a hope value, people will not put their land forward for affordable housing. The only way to provide affordable housing in the countryside is to have strict control on planning and development. I know that that sounds counterintuitive, but that is the only way to deliver the exceptionland that is strictly for affordable housing. Those sites will not be made available if we take a flexible, laissez-faire approach that allows any sort of development. People will not make land available for affordable housing in the countryside because they would inevitably receive a fraction of the value that they would otherwise receive for an unfettered permission to develop.
	The Minister raised the issue of, and responded to concerns about, second homes. That issue certainly affects my constituency and many others. I campaigned for many years for the removal of the 50 per cent. council tax discount for second homes, introduced by the Conservatives, which meant that many millions of pounds was spent subsidising the wealthy when many thousands of rural folk on low incomes could not even afford a first home. I am grateful that the Government have mostly removed that unfairness by allowing local authorities to charge 90 per cent. of the tax for second homes. In my constituency, we have recently cut the ribbon on a new schemeas the Minister saidwhich was entirely funded by the money raised by the additional charge on second homes.
	Is the Minister aware, however, that in April next year his colleagues in the Treasury will introduce, through the self-invested personal pension, a system that will permit those with personal pensions to invest that money in second homes? I received some reassurance after a debate last year that that would not happen, but all the financial press is now promoting the scheme and saying that the tax advantages of the scheme could be used for the purchase of second homes. Many people in areas with large numbers of second homes will be very concerned by the potential impact of that scheme, and I hope that the Minister will consider it further.

Robert Jackson: This is my maiden speech as the first Labour Member of Parliament for Wantage. I am delighted to make it on a subject that is important in my constituencyfarming and rural affairs. It is agreeable, I must say, to be sitting in my old place on these Benches.
	I am just old enough to remember the respect and affection in the farming community for Tom Williams, the agriculture Minister in the post-war Attlee Government and the architect of the deficiency payments system, by which farming in Britain was supported until 1973. As the European common agricultural policy evolves away from the market intervention methods of the classical CAP towards the same sort of direct payments system adopted by Tom Williams, I observe that British farmers have nothing to fear and much to hope for from a Labour Government.
	I first learned to understand the importance and value of farming in British life when I served as a Member of the European Parliament between 1979 and 1984. Ever since those days, I have had regular meetings every few months with local farmers. Indeed, I had such a meeting only last Friday night. I developed a custom of writing a detailed letter to the Minister after each of those meetings, reporting on them and posing the questions that had been raised. I am glad to say that I have always had full and helpful replies to those letters from Ministers in both Conservative and Labour Governments, and I thank my right hon. Friend the Minister for his contribution to that.
	In a fit of over-excitement in the mid-1980s, I even wrote a pamphlet with the dramatic title, From Boom to Bust? The Implications of CAP Reform for British Farming. As so often in politics, the reality turned out to be less dramatic. The argument that I want to make today is that while much has changed in the 25 years in which I have been interested in the politics of the rural economy much has also remained the same. There is strikingly little correlation between changes of Government and the trends, both positive and negative, in the rural economy.
	For instance, no one involved in farming would deny that the biggest single factor in its changing fortunes is the exchange rate between the pound and the euro or, before its introduction, the ecu. That has not been mentioned in our debate, but a farmer once told mecorrectly, I thinkthat it is always 60 per cent. of the problem. There is no doubt that British farming would benefit from stabilising that critical exchange rate by joining the euro. Perhaps I may be allowed in passing to make the party political point that the Labour party wants Britain to join the euro, while on this issue, as on so many others, I am afraid, the Conservatives have settled definitively into the politics of Neverland. The fluctuating pound-euro rate is a critical factor that has continued to operate across the divide represented by the change of Government in 1997.
	More positively, another factor of continuity is the United Kingdom's broad approach to reform of the common agricultural policy and to the wider issues of agricultural trade in the Doha round. Governments of both parties have pursued essentially the same policy of decoupling farm supports from production, ending export subsidies and promoting trade liberalisation. I have always supported those policies, and I have always found that my farming constituents understood and supported the principles involved, although not necessarily the details of implementation. Both parties in government have shown a lively awareness of the special problem of British farming in the European settingour relatively large farm-size structure. Both have sought tenaciously, as far as possible, to resist CAP reforms that are biased against the interests of larger producers.
	One of the biggest changes in the rural economy since I first became involved in the late 1970s is the relative decline in farming's contribution to the total economy, which has gone down from about 3 per cent. in 1973 to 0.8 per cent. today. Again, that relative decline has continued across the divide of 1997. That is also true of efforts by Governments of both parties to promote the diversification of the rural economy, in which my right hon. Friend the Member for Oxford, East (Mr. Smith) took a particular and welcome interest when he was Minister for Employment. One of the results of the study that he carried out on the Government's behalf was the important market towns initiative. To be party political again for a moment, I wonder how many of these efforts to support rural diversification would survive a Conservative Government planning a 35 billion cut in public expenditure?
	Beneath those broad continuities of policy between Governments over time there is, of course, a host of current issues that come and go. For instance, at my constituency meeting with farmers last Friday I was asked to raise four issuesfarm waste disposal and the local operation of the national fallen stock scheme; the threat of bovine tuberculosis; the Discovering Lost Ways project, which has not been mentioned yet in our debate; and the increasing burden of regulation. I shall write to my right hon. Friend the Minister for Rural Affairs and Local Environmental Quality in detail about those issues, but I hope that the Under-Secretary will say something about them in his winding-up speech. In particular, would he comment on the fact, relayed to me last Friday, that there has been no bidder for work in my area under the national fallen stock scheme? Could he also say something about how the Government intend to grasp the nettle of bovine tuberculosis and prevent it from spreading into Oxfordshire?
	Before I conclude, let me briefly address two of those current issues. There is genuine concern in the local farming community about the possible negative implications of the Discovering Lost Ways project. We are all familiar with the way in which existing rights of way can be abused. Indeed, I take this opportunity publicly to thank my right hon. Friend the Minister for his active engagement with the problems of abuse, by 4x4 vehicles and motor cyclists, of the great, historic Ridgeway, which runs through my constituency. I suggest that the Government go easy on discovering lost ways, at least until the new regime under the Countryside and Rights of Way Act 2000 settles down properly.
	The second point is about regulation. We should remember the background. The most important events in the recent history of British farming were the emergence of BSE, followed by the foot and mouth disaster. I note in passing that in both crises the Government of the day, Conservative and then Labour, followed closely the advice given by representatives of the farming industry. Indeed, some would say that they followed that advice too closely. I have told farmers in my constituency frankly, and I say it again, that after two such disasters on their watchso to speakit was inevitable that farming in Britain would be subject to a barrage of regulation, both from Brussels and from Whitehall. Equally, there is no doubt, as I am sure my right hon. Friend will accept, that some of that regulation is ill thought out, that sometimes there are inconsistencies between different elements of it, and that there are all sorts of glitches in its implementation, even including, sometimes, the coming into force of schemes before the details of how to comply with them has been vouchsafed.
	The Government are currently carrying out a review, aiming for a strategy for better regulation of agriculture to be published in November. I shall do what I can from these Benches to encourage Ministers to take that issue seriously, as it is currently one of the biggest bugbears in the rural community.
	At the beginning of my speech, I referred to Tom Williams and the way in which the post-war Labour Government won friends in the rural community. My speech has, I think, amply shown that on the big questions of policy those with a stake in the rural economy have much for which to thank the present Government and much to hope for from them. However, as I have acquired a perhaps undeserved reputation for speaking my mind, I say to the Minister in conclusionI am sorry to end on this notethat some of that heritage of rural good will has been forfeited by the hunting ban. Of course, it was a free-vote issue, and support for the ban and opposition to it has always been on a cross-party basis. I attended a meet of the Old Berkshire hunt at Goosey on Saturday morning where I found admiring recognition of the contributions of my hon. Friend the Member for Vauxhall (Kate Hoey) and of Bernard Donoughue and Ann Mallalieu in another place.
	The story has not yet reached its denouement. The experience of Scotland has shown that it is possible for lawful riding to hounds to continue even after a ban on hunting with dogs. I am pleased that the Government are taking time for the matter to be addressed by the courts, and I note that all sorts of detail about the implementation of the policy remain to be resolved. I believe that somehow a way can be found for the honourable traditions of the countryside to be preserved, and I look forward to making whatever contribution I can from these Benches to that worthy purpose.
	The fact is that the Labour party, too, has a honourable place in the annals of the countryside, which the Government, with their wide-ranging policies for the rural economy as a whole, are doing well to maintain.

Peter Atkinson: I am grateful to the hon. Member for Wantage (Mr. Jackson) for at least one thing in his speechthe support of hunting. It is a pleasure to hear someone on the Labour Benches putting forward a sensible view on that sport. I agree with him about one other thing. He mentioned Tom Williams, a formidable Labour agriculture Minister. Mr. Williams was also a staunch defender of hunting and for many years resisted attempts by Labour party members to ban it. For such small mercies, Mr. Deputy Speaker, we are grateful.
	The last debate in the House in Government time on the serious issues of agriculture and farming was on 12 December 2002. It continues to be a matter of regret that dealing with something of enormous importance to this country is constantly sidelined by the Government and has to be debated in the House in short Opposition and Adjournment debates. It is wrong that the whole practice of holding a substantial debate on agriculture has been abandoned by the Government. For me and, I think, for the farming community, that reflects the Government's view of agriculture.
	My hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) quoted DEFRA officials saying at the royal show that agriculture was neither necessary nor desirable for this country. Those comments underline a great deal of the thinking that exists in government about the problems that face agriculture.
	We have experienced one of the most dramatic changes in agriculture since the Agriculture Act 1947, and we are debating that change and all that flows from it not in a proper full-scale debate, but in a short Opposition day debate. The introduction of the single farm payment has been marked by chaos. Today is 19 Januarya significant date in the life of my hon. Friend the Member for Buckingham (Mr. Bercow)and we are well into the new year, but farmers still do not know exactly what they should do. For example, livestock farmers in my constituency in Northumberland are still awaiting a host of details about their cost-compliance arrangements, which are fundamental to some of the decisions that they must make.

John Bercow: I do not know how many farmers in my constituency or in the vale of Aylesbury as a whole have their birthdays today, but I can only say that I am intimately conscious of the fact that, such is the self-preservation of my hon. Friend, many people might reasonably conclude that I am 20 years older than he is.

Mr. Deputy Speaker: Order. I am sure that there is general rejoicing at the birthday of the hon. Member for Buckingham (Mr. Bercow) and for the fact that his intervention today was rather shorter than the one yesterday.

Peter Atkinson: Thank you, Mr. Deputy Speaker. The Minister looks puzzled. It is a rather private joke, but we will enlighten him with a note later.

Bill Wiggin: I hope the Minister will be able to enlighten us. Fallen stock has been mentioned, and I am curious to find out what would happen to a sheep with an ear tag that fell into a river and was washed a long way downstream. Would the responsibility for dealing with that dead animal lie with the Environment Agency, or would it seek to trace the owner using the ear tag and get him to pay for the incineration of the dead animal?

Peter Atkinson: That is a good question. I hope that the Minister can answer itI certainly cannotand it shows one of the confusions that exist.
	Returning to the serious subject of livestock farmers in the uplands, we think that, according to the cost-compliance regulations, the use of round cattle feeders will not be allowed because of the danger of the excessive poaching of the ground around them. If those things are not allowed under the cost-compliance regulations, the cattle will have to go inside much earlier in the season, which will have a profound effect on the economy of those beef-rearing farms. Clearly, the farmers will have to feed their cattle inside much more intensively as a result. That is one example of why it is important that farmers know the answers as quickly as possible.
	The DEFRA roadshow, which will be launched any day now, will not reach the north country until the end of March. It first arrives at Carlisle on 17 March, which is St. Patrick's dayfar too late for farmers to know exactly what to do. The beef sector will continue to struggle until farmers are clear about how they can develop their herds, and to do so, they need to know the details of how the cost-compliance schemes will work.
	We have touched on the dairy industry. Where I live in north-east England, we are now down to a handful of dairy herds. Most of the farmers with dairy herds have either given up and gone away or turned to other things. That is amazing in this country. One thing that God gave this country was the ability to grow grass. We are located on the west of Europe; we have a brilliant climate for dairy farming, yet we face a 700 million deficit in the balance of payments on dairy products. A serious aspect of the problem is the fact that a substantial number of the new modern products that consumers wantsuch things as yoghurtsare produced abroad and imported into the UK, which leaves our farmers to supply the liquid milk and cheese markets. That is nonsense because we will not be able to encourage the food processors and manufacturers that create such new products to come to this country unless we have a proper supply of milk, and we will not have a proper supply of milk if more dairy farmers simply go out of business.
	The Government seem unwilling to address the crucial problem of how to make smaller dairies more economic. We need to bring the profitability of those dairies up to that of the biggest, but that will not be encouraged while dairy farmers are battered from head to foot by supermarket competition, which is endlessly driving down the price of milk to such an extent that most dairy farmers would be losing money if they properly factored their labour costs into the equation.
	Bovine tuberculosis is another major crisis facing the dairy industry. The Irish have been studying the effect of badgers on bovine TB since about 1997 and have recently reported. I am sure that the Minister is aware that in areas in which there was a substantial cull of badgers, the number of herds reporting TB reactor cattle dropped dramatically. There might well be criticisms of the methodology of the Irish survey, but it is the best evidence that we currently have to suggest that bovine TB can be controlled, albeit only with a programme of culling infected badgers. The Government stand accused of considerable complacency on the matter.
	I shall be brief because I know that other hon. Members wish to speak. The Minister for Rural Affairs and Local Environmental Quality seemed to dismiss agriculture as a declining and unimportant aspect of rural life. Of course it has been overtaken by tourism and commuter jobs, but agriculture and farming still underpin the essence of rural life. The Government have a duty to maintain an important industry for the benefit of the countryside and the people who live in it.

Huw Edwards: It is a pleasure to speak in the debate and I am especially pleased to follow my hon. Friend the Member for Wantage (Mr. Jackson). I welcome him to these Benches and commend him on his courage for doing what many people in this country have done, especially in areas such as minerealising that the Conservative party that they supported in the past does not represent the values that they think it should and changing the habit of a lifetime by coming over to the Labour party. My hon. Friend is welcome to speak to farmers and others in my constituency because his thoughtful contribution would be well acknowledged.
	I do not agree with my hon. Friend's view on hunting. I represent a rural constituency in which there has been a tradition of hunting, but hunting is a fundamentally moral issue. I think that it is morally wrong to hunt with dogs for the purpose of sport, and remain of that view despite the fact that I fully acknowledge the need to remove foxes that are a threat to livestock and appreciate the contribution that the hunting community has made on fallen stockthat is one of the great challenges that remains.
	My constituency of Monmouth is very rural. It was badly hit by the foot and mouth outbreak a few years ago, but there has since been a notable improvement in morale. Livestock prices in the beef and sheep sectors have increased, but there is no doubt that there is a continuing crisis in the dairy sector. The Usk valley used to be rich in dairy farms, but the number has diminished considerably. I commend the efforts of those who are trying to get a better price for milk producers. The Welsh Affairs Committee undertook an inquiry on prices in the livestock sector a few years ago and one of its recommendations led to the introduction of a code of practice. The code needs strengthening, however, so I commend all those who are doing their best to achieve that.
	I recently met some tenant farmers in my constituency who told me that the price of raw milk is still only about 17 or 18p. They cannot make any profit from that. As tenant farmers, they face other difficulties, not least that of finding housing when they retire. Traditionally, they would have sold their stock when they ceased to trade in order to buy themselves a country residence, but that has become virtually impossible because of the price of housing in rural areas. Schemes such as shared equity schemes, which were mentioned earlier, should be encouraged. After the Housing Act 1919, clusters of council housing were developed throughout the countryside. Sadly, much of that has been sold as a result of right to buy. I was not fundamentally opposed to the policy, but I was against the failure to replenish social housing using the receipts from the scheme.
	I come to the sale of woodland, an issue that has particularly concerned me recently. I commend Members on both sides of the House who have recognised the threat of the subdivision and sale of agricultural land. The hon. Members for Wealden (Charles Hendry) and for Isle of Wight (Mr. Turner) have taken up the matter. In my constituency it is the sale and subdivision not of agricultural land, but of woodland that is causing concern. As a result of the initiatives taken by the Government in England and now in Wales, local authorities have been given guidance to inform them of the scope that they have in planning regulations to introduce what are called article 4 directives, and thus ensure that they can override permitted development rights where there is a threat of the sale of woodland.
	Hon. Members on both sides of the House will, as they travel through their constituencies and elsewhere in the land, have seen signs saying Woodland for sale. I urge them to look at the website of the company selling the land so that they can see what might happen if such woodland was subdivided into small plots and sold to people who are led to believe that they can use the land for bonfire parties, parking their caravans and undertaking other activities that would not normally be acceptable in a rural area, and certainly not in an area of outstanding natural beauty such the Wye valley in my constituency.
	My constituency has suffered as a result of the crisis in farming in the past 10 years. There was a time when I was summoned to angry meetings of farmers. I have not seen such meetings in recent yearsI think that morale in the farming community has risen. I notice that a recent Farmers Guardian reported a new year and a new era of optimism, saying that there is a general feeling of optimism for the coming year throughout the industry, and that although accepting the introduction of CAP reforms on 1 January will represent the biggest challenge facing the industry for years, many look on it as a great era of opportunity. That is a more optimistic outlook for farming than is contained in the Opposition motion, which is particularly depressing and pessimistic.
	The farmers in my constituency want to see new investment. I hope that we will get a new livestock market in or around Abergavenny in my constituency. That would be an important boost to the industry's infrastructure in Monmouthshire, in neighbouring areas of Wales and over the English border. Such an investment would be very welcome and I hope that the decision to invest in such a facility will be taken at the earliest opportunity.
	I say to my hon. Friend the Minister that many of us on these Benches represent rural constituencies. We may take a certain moral view on hunting, but fundamentally we want to do our very best to help the farming communities in our constituencies.

Geoffrey Clifton-Brown: I am pleased to follow the hon. Member for Monmouth (Mr. Edwards), who is one of the few sincere Labour Members who really understand farming.
	I was particularly impressed by the speech of my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice). He is one of the most knowledgeable people in the House on agriculture and he made some telling points, not least of which was when he, spurred on by my intervention, criticised the overly complicated hybrid system on single farm payments that the Government are introducing. I have a table here showing that the UK is the only country introducing such a complicated systemit is even more complicated than those of Luxembourg and Sweden.
	We have different systems for England, for Scotland, for Northern Ireland and for Wales. Although I concede some regional differences, that strikes me as unnecessary complication from a single Brussels directive. To introduce such complexity at a time when the way in which the Rural Payments Agency works is being reformed seems like a recipe for chaos in the agricultural industry.

Peter Atkinson: Because Scotland has adopted a different system from England, farmers in Northumberland on the border will be at a disadvantage. Initially, beef farmers in Scotland will get bigger payments and will therefore be able to pay more for pedigree cattle.

Geoffrey Clifton-Brown: I entirely concur with my hon. Friend's point. He has great knowledge of agriculture, and I understand the difficulties he faces living on a border between two different systems. My hon. Friend the Member for South-East Cambridgeshire held up the number of leaflets involved in this overcomplicated system. Just imagine what French farmers would do if they received so many leaflets.
	In an intervention, I mentioned the balance of payments deficit in the dairy industry. The problem is that we export the cheap dairy productsmilk and milk powderand import the expensive, value-added products such as butter, yoghurt and, in particular, cheese. That is a tragedy because we should be producing those value-added products in this country, instead of which we have a 700 million balance of payments deficit in that sector contributing to this country's 33.6 billion overall balance of payments deficit. Agriculture should not be adding to that problem.
	On 1 January, in a move that we broadly welcomed, the Government abolished various subsidies to the beef industry, including the over-30-months scheme subsidy. The problem is that 300 a beast in subsidy is to be taken away. When we consider that a farmer has to get 720 a beast to make a profit, we begin to see the distortion affecting the market. I am not sure how that will settle down.
	I want to discuss how the Government have allowed food processing to move out of this country. Almost no pig slaughtering is left in this country because the industry has moved to Holland. A big dairy co-operative was formed in Holland recently, at a time when the Government have weakened our co-operative efforts by weakening Milk Marque's ability to maintain a broad presence in the dairy sector.
	I urge the Government to support the British sugar beet industry. We produce only 50 per cent. of the sugar that we consume, so there is no case for a disproportionate cut in European Community support for our sugar beet industry.
	I also urge the Government strongly to support the biofuels initiative. The 20p per litre reduction in duty is welcome, but the present position is crazy: our wheat is sent across the channel to be processed into biofuel, which is then brought back to this country. We should be helping the biofuels industry and the jobs that it can create in this country. If Wessex Biofuels could get its useful initiative off the ground, it could use 375,000 tonnes of wheat.
	In the context of sustainability, we should examine the supermarkets' actions carefully. I know that the Under-Secretary is very keen on sustainability. Tesco's biofuel is produced in part using palm oil derived from trees cut down in the rain forest. It would be far more sensible to have a home-bred biofuels industry than to rely on imported products.
	The Government talk about the rural economy in their amendment, but in the past seven years I have seen in my constituency, which is highly rural, the closure of several post offices. Two Crown post offices closed only the other day, and a third, in Wotton-under-Edge, is now threatened with closure. They talk in glowing terms about their rural bus subsidy grant, but although they give 300 million to all the rural areas of England and Wales, they give a 1 billion subsidy for buses in London. Where is the fairness in that?
	The Minister made a great fanfare about rural housing, but the fact is that the Government are building only half the number of affordable housing units that the Conservatives were building when they left office in 1997. They have no record to crow about there. Under a Labour Government, we have the highest number of homeless people that this country has ever seen, so there is nothing to crow about there either.
	Far from farmers' morale being high, as has been asserted, they are being bogged down with unnecessary paperwork from the Government. They cannot see a sustainable future. The Government need to be clear about what they want farmers to do. Farmers ask merely to make a profitable livelihood, not to be bogged down in overcomplicated paperwork.
	I am grateful to be called to speak in the debate. It is useful to be able to discuss the problems of rural areas. In my constituency morale is not high, it is sinking.

David Kidney: It is a pleasure to follow the hon. Member for Cotswold (Mr. Clifton-Brown), and it is a pleasure to follow my new hon. Friend the Member for Wantage (Mr. Jackson), who spoke earlier in the debate.
	In so far as we pose in the debate the question, Is there a future for UK farming?, I sincerely hope that the House will unite and answer that there is indisputably a future for British farming. I hope that we will work together to establish what still needs to be done to ensure that our farmers feel secure. If hon. Members will forgive me, I shall deal only with farming in my short contribution.
	I begin with the CAP reform agreement last June. Surely the Conservatives accept that although in government they talked a good game on CAP reform, it was a Labour Government who secured an historic agreement that enables us to help farmers. The most important part of the agreement is the decoupling, at last, of the subsidythe public payments to farmersfrom production. The distortion of prices arising from that has caused many of the problems in farming in this country and around the world.
	Now that decoupling has been achieved, we can press on with the recommendations of the Curry commission for reconnecting farming businesses with their markets. That is the important job for us to do. It will be a worrying time for farmers, having that prop taken away from them and having to focus on their markets. Our job in Parliament is to reassure them through the changes and make sure that they get to those markets. No more will there be butter mountains and wine lakes at public expense in the European Union.
	In the agreement, the Governments of the member states had a choice of start dates. We chose the first possible date1 January 2005. That is an indication of our determination to do the best for our farmers. Of course, implementation is different in England, Wales, Scotland and Northern Ireland, but that is the beauty of devolution. We should be glad of it, not disappointed.
	The hon. Member for St. Ives (Andrew George) asked what taxpayers would get for their public subsidy. It is an excellent question, which now has an excellent answer. First, with single farm payments there will be cross-compliance, leading to some highly desirable public goods such as land management and the maintenance of rights of way, which are benefits to all taxpayers. With modulation and an enhanced stewardship schemethe entry level and the higher levelwe will be able to achieve much more in terms of biodiversity. I predict that growing attention will be paid to land management and flood defences. In future, conditions will be attached to stewardship schemes so that farmers can help the rest of us to avert floods such as those at Boscastle and Carlisle through the way that they manage their land upstream, so to speak.
	I thank the officials at DEFRA who, at the end of last year, held a technical briefing for Members. I also praise DEFRA Ministers for that growing practice of the new Department. That briefing was the third that I have attended. In the past there were briefings on the control of illegal meat imports and on what the Government were doing about bovine TB. At the third briefing, Members were able to pursue in detail their questions about the new scheme for single payments, which I found extremely helpful.
	Common agricultural policy reform did not harm the growing diversification of energy crops. In my constituency there is a very large biocrops scheme, which benefited in the past from grants from DEFRA and the Department of Trade and Industry, and will continue to benefit from payments under the single farm scheme and the set-aside scheme, as a result of the agreement. All those are benefits.
	I want to say a word about how what we do for our farmers affects the rest of the world. At the moment, we are all paying a lot of attention to the help that rich countries can give to poor countries. Everybody knows about cancelling debt and giving aid, and most people are now convinced that trade is the best way to help in terms of liberalising access to markets for producers in poor countries, and agriculture forms an important market for them. However, as we learned with the EU's announcement of the Everything but Arms initiative, if such measures are rushed they cause great dislocation and harm to farming inside the EU. Sugar beet was a good example of jumping in and having to rescue the situation afterwardsand, as we heard from interventions during the opening speech today, it has not yet been rescued.
	The sugar beet industry is keen on diversification, having seen what is coming, and bioethanol is an important by-product in which it is interested. As has rightly been said, the reduction in duty is helpful, but on its own it is not enough, and I support that industry and its calls for capital allowances and some kind of renewables obligations specific to the industry that will be helpful.
	Another example of the effects on world trade of decisions taken inside the EU is provided by the egg industry, which yesterday hosted a reception on the welfare standards being set inside the EU and their effect on future imports from countries outside the EU that do not meet those higher welfare standards. It is very concerned about becoming more and more uncompetitive against people who obtain ever greater access to our markets. That is an important issue that it wants us to take into account. It is important for us in this House and in the EU to balance welfare issues with competitiveness issues for our farmers.
	Just to repeat the point that I made in an intervention earlier with regard to the challenges about red tape, I accept that DEFRA's rule strategy is a great attempt to reduce red tape at every level, with more than 100 funding streams reduced to three, but basically the agreement that we have reached in the EU about the single payment scheme reduces 10 previous schemes to one, with one single system for application and one single system for inspection. If we can link that to what we are trying to achieve in Britain in terms of the whole farm approach to holding farms to account for the public subsidy that they receive, we will do a good job for farmers.

Ian Liddell-Grainger: Is the Minister aware that the National Bee Unit is under threat? Does he realise that the bee unit is about to lose 20 per cent. of its income. Its funding comes from the Government and the loss of 20 per cent. will make a massive difference to it.
	There are two types of bee inspectorsa regional bee inspector, whose job it is to look after the south-west, the north-east, or wherever

Geoffrey Clifton-Brown: The big bee.

Ian Liddell-Grainger: He is the big bee, as my hon. Friend points out. The second type is the seasonal bee inspector, whose job it is to go round all the hives. At the moment the bees are dormant and doing nothing other than hibernating, I hope, although it is warm enough for them to go out. He is responsible for checking the bees and their quality in that period. The noble Lord Haskins has not got this seriously wrong.
	The Minister will probably not be aware that a 20 per cent. cut in the income of the bee unit means that half the inspectors will go. Their number cannot be sustained. What does that mean for the bees? The bee inspector's job is threefoldfirst, to check swarm purity; secondly, to ensure that the quality of the hives is what it should be; and, thirdly, to check for bugs in the hives.
	It may not come as any great surprise to Conservative Members that most of the diseases that we try to combat come from Europe, which is where the inspectors spend most of their time. But the Minister should be aware that the crying shame, or the disgrace, is that the Government put in 125,000, with the rest of the funding coming from Europe. The importance of the bee in agriculture, horticulture and just about every other culture, cannot be underestimated. Surely the Government should be championing good quality, healthy bees. The problem is petty-minded, stupid bureaucracy. What is the point of cutting money from a unit that safeguards something that is so important to agriculture?
	The Government probably do not know that bees bring 120 million a year into agricultural industries through not only honey and beeswax, which is used for all kinds of different things, but importing and exporting different swarms. I have received a letter from a constituent, Rev. Ivan Selman, about that matter. He makes the point that the private benefit to beekeepers is estimated to be only 11.3 million and that many hobby beekeepers make little or no profit. Surely this is the crux of the matter: the people who produce honey do so because they want to and because they enjoy doing it; they do not do it because they make a fortune. We cannot expect to have healthy animals in this country if we do not have inspectors, and the Government, who have banged on about inspectors, must address the matter urgently.
	Given the short time that remains, I shall turn to Exmoor national park. The Minister knows the effect of the ban on hunting on Exmoor. The ban will make a difference, it has made a difference and it needs to be addressed. This Friday, my hon. Friend the Member for Taunton (Mr. Flook), the hon. Member for North Devon (Nick Harvey) and I will have our quarterly meeting with the national park, at which we will discuss the problems that the park will face due to the hunting ban.
	The Minister knows Exmoor national park's concerns, and I hope that he will manage to address some of them. They have been raised by not only hon. Members but members of the national park, the county councils, the district councils and the parish councils. The ban will cost up to 9 million across the park, which is a lot for an area such as ours, and we cannot sustain that loss. The Government intimated that they would examine the introduction of some form of financial inducement, and I wonder whether the Minister is prepared to expand on that point.
	Somerset gets very little objective 2 funding: Cornwall receives objective 1 funding; Devon receives objective 2 funding; and Somerset receives a little bit of objective 2 funding. One of the problems in rural areas is that we cannot match such funding. The Minister is aware of that point, which we have discussed before, but we have not resolved how rural areas can raise match funding. The Government have been asked the question time and again, but we are still waiting for answers. The Government have not listened, because we have the same problems as Cornwallin most cases, incomes are lower in Somerset than in Cornwall because of the housing crisis in rural areas, which many hon. Members have already eloquently discussed.
	British Telecom is removing phone boxes, which it claims are not being used, from rural areas. Mobile phones do not work in many parts of Exmoor because one cannot get a signal, which is partly due to planning restrictions, but mainly due to the type of ground. The Minister says that he is looking to put money and help into rural areas. What is the point of rolling out broadband if homeowners in such locations cannot make phone calls? We prevailed on BT to try to reverse that decision, and I know that the Government have been involved, but the removals are still occurring. We are losing phone boxes across Exmoor and the Somerset Levels as we speak. Will the Minister consider intervening to try to persuade BT, which I accept is a private company, to stop that practice so that we can get back communication in our local areas?
	Finally, may I draw the Minister's attention to the piece in this week's Farmers Weekly on bovine TB, Call Time on Brock, which reports on the experiment in Ireland? It makes good reading and seems eminently sensible. I am sure that the Under-Secretary of State for Environment, Food and Rural Affairs, who has responsibility for TB, has examined the matter, and, given that the solution in the article seems sensible, perhaps he will mention it.

James Gray: As so often in agriculture debates in this House, we have had a sensible, useful and relatively well-balanced debate with a great deal of expertise on both sides of the House. Leaving aside the Minister's introductory speech, which was slightly sullied by party politics, Government and Opposition Members have contributed a great deal to the debate.
	The hon. Member for St. Ives (Andrew George) pointed out that more farmers have left the industry under Labour than at any time since the last war. He then got rather muddled, however, about how he supports the area-based payments under the mid-term review in England and the historic payments in Scotland. He is a Liberal, and he is all things to all men.
	I pay tribute to the hon. Member for Monmouth (Mr. Edwards), because in our index of the rurality of seats, Monmouth is the second most rural Labour seat, at 63rd. I shall return to that in a moment. He knows what he is talking about, especially with regard to the subdivision of farmland and the problems facing woodland.
	My hon. Friend the Member for Hexham (Mr. Atkinson), who knows farming inside out and back to front, highlighted a topic that has arisen throughout the debatethe threat to the beef and dairy industry from the complex introduction of the single farm payment. His comments were echoed by those of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) and several other hon. Members.
	The hon. Member for Stafford (Mr. Kidney) said that he hopes that there is a great future for British farming, although he did not explain where it was to come from, and he seemed uncertain about whether Labour's promise to bring in the mid-term review might come back to haunt it in the fullness of time.
	My hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) made some useful and interesting comments about beesan extremely important, if comical, issue in the countryside.
	Before I say anything else, I want to lay to ground a perfectly absurd spin that the Labour party is always coming out with

Roger Williams: Will the hon. Gentleman give way?

James Gray: I fear that I do not have time to do so.
	Labour Members are always saying that Labour is the party of the countryside. Indeed, I have here a rather good quote from none other than the Prime Minister, who declared in 1996:
	I love our countryside, I love the variety . . . for me it is the open spaces, the closeness to nature.
	That sounds a bit like Monty Python's lumberjack sketch, although I have every confidence that the Prime Minister does not like to put on women's clothing or hang around in bars. It is all talk. Labour Members love the soundbite, but, as a farmer friend of mine said recently, Soundbites don't butter no parsnips. There is a great deal of truth in that old Wiltshire saying.
	The Minister claimed that Labour has 180 rural and semi-rural seats. I pay tribute to my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), who, some time ago, did a huge amount of work to calculate which are the most rural seats in Britain, using population density, the number of people employed in agriculture, and a variety of other indexes. I have the list here. Of the top 200, two are represented by LabourCarrick, Cumnock and Doon Valley and, at No. 63, Monmouth; the rest are exclusively represented by Conservative and Liberal Democrat Members of Parliament. The notion that Labour is the party of the countryside works only if one includes places such as Reading, East, Reading, West and Swindon. No doubt Exeter claims to be a rural seat, but it ain't. It is absurd to suggest that the Labour party represents rural areas. Happily, the work done by my hon. Friend the Member for South Holland and The Deepings has been published and is available in the Library for all to look at. The truth of the matter is that rural areas are overwhelmingly represented by the life-long friend of the farmerthe Conservative party.
	Labour Ministers, in particular, know little about farming and seem to care less. That was amply demonstrated by the Minister's opening speech. He calls himself the Minister for rural affairs, but when he ventures into the countryside, which is rarely enough, he is about as popular as myxomatosis in a rabbit hutch. That, of course, was the expression used with regard to the arrival on the Labour Benches of the Minister's hon. Friend, the hon. Member for Wantage (Mr. Jackson). I hope that his strong support for the war in Iraq and top-up fees, his views on the European Union and the single currency and his strong support for hunting make him very welcome on the Labour Benches, but I suspect that the description, about as popular as myxomatosis in a rabbit hutch, applies as much to him as it does to the Minister.
	The contrast with my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) is stark. He knows about farming; he was a farmer for many years; he has looked after this portfolio, in different guises, for a very long time; and he speaks with care, knowledge and balance on the issuessomething that I myself would not necessarily claim to do.
	Today's debate has had to answer a fundamental question: do we want to produce our own food? Do we believe that the Government have a duty to maintain a reasonable supply for the British people? Or are we content to become increasingly dependent on overseas countries: beef from Argentina, milk from France and Poland and chicken from Thailand? That is the way we are going. Our self-sufficiency in food has declined by 4 per cent. since 1997. We now have more DEFRA civil servants14,460than dairy farmers, of whom there are only 14,300.
	The world's strategic reserve of food is at a historic low of 63 days compared with 104 when we left power. We have 63 days worth of food in the world today. Britain could contribute to that, but are we? The fundamental questions that arise from our debate are: can we carry on as we are? Is farming in terminal decline? Are we content to become ever more reliant on overseas producers, whose standards of animal welfare and human hygiene would often not be allowed in the United Kingdom? Any focus group would reply with a resounding no. We want to eat British food and we want to know where it comes from and how it is produced. However, under the Labour Government, the questions about the source of food and the method of its production are becomingly increasingly difficult to answer.
	The Government's botched implementation of the single farm payment risks making matters even worse and turning our green and pleasant land into an urban playground or letting it decline into untended scrub land. There is a genuine risk of that and I call on the Government and the Under-Secretary to tell us how they will avoid that unwelcome consequence of the single farm payment.
	The Government have not only failed on farming. We must remember that 14.1 million people live in rural districts and that the debate is not all about farmers but about rural life in general. The Government have failed to preserve village and rural life. Homelessness in rural areas has soared by 13 per cent. since they came to power. Rural property prices are 15 per cent. above national averages so that people on low wages cannot possibly afford to live in rural areas. Fifty-eight per cent. of households in rural areas have no access to any form of public transport and rural crime costs farmers 100 million a year when 98 per cent. of rural parishes have no permanently staffed police presence. Three thousand rural post offices are closed and continue to close at the rate of three a week, assisted by the ghastly Government.
	The Deputy Prime Minister's changes to planning laws will, if anything, ensure that especially the south-east and the south-west will suck in businesses and houses from the north of England and ensure that the most environmentally sensitive and beautiful parts of at least the south half of the island will be concreted over as quickly as he can possibly achieve that.
	The Government have failed to maintain villages. Funding from the national lottery for the village hall, so central to village life, has disappeared. They have done away with it and village halls will suffer. They have failed to preserve the rural way of life, abolishing hunting and now threatening shooting. Not only farming but the way of life is in crisis because of the Government. The entire way of life for 14.1 million people who live in villages and market towns is under threat. The villages, the churches, the halls and the whole approach to life will go. The Labour Government will turn the countryside into some sort of dormitory for their urban friends.
	By contrast, our vision is of a living, vibrant countryside, with real people doing real jobs and living real lives. It is of a profitable farming industry, thriving rural businesses and a traditional way of life, which people in the countryside so badly need. All of that is fundamentally undermined by a quintessentially urban Labour Government.

Ben Bradshaw: The hon. Member for North Wiltshire (Mr. Gray) began by describing the debate as constructive and bipartisan, but he did not follow the tradition that he lauded.
	It is a great pleasure to be winding up in our important debate. It is especially pleasurable to reply to a debate in which my hon. Friend the Member for Wantage (Mr. Jackson) made what he described as his maiden speech as the Labour Member of Parliament for Wantage. I should like to think that my hon. Friend was a friend of mine before he crossed the Floor, but he certainly is now. His speech was refreshingly unpartisan. It had historical perspective and drew on his experience as a former Member of the European Parliament.
	My hon. Friend mentioned the issue that dare not speak its name in many debates on the state of the agricultural economy: the role of the exchange rate and the euro. He made an important point, and many of the most sensible commentators and, indeed, people involved in agriculture realise that the stability gained from joining the euro would mean enormous benefits. That is almost never debated.
	My hon. Friend the Member for Wantage also rightly reminded the House that issues such as CAP reform and trade liberalisation have traditionally been bipartisan issues that have been progressed by Governments of both political colours. He pointed out that, whether we like it or not, under successive Governments the size of the agricultural economy as a proportion of the overall economy has shrunk from 3 per cent. in the early 1970s to 0.8 per cent. now. Another bipartisan issue that he raised was the balance that always has to be struck between regulation and food safety and animal health. That is a difficult balance for any Government to strike. He warned me that he was an assiduous letter-writer on behalf of farmers, and I look forward to receiving letters from him.
	If I do not have time in the few minutes that remain to address all the points raised in the debate, I promise to write to hon. Members on those subjects. My hon. Friend the Member for Wantage mentioned the impact of the fallen stock scheme on his constituency, and I will certainly look into the suggestion that there might not be a collection service available in his area. I am assured by Michael Seals, the chairman of the fallen stock schemean industry-run schemethat there is a nationwide network that extends even to the Isle of Wight. I shall write to my hon. Friend with the details that he has requested.
	The hon. Member for Isle of Wight (Mr. Turner) was right to say that there were particular challenges in his constituency. Following negotiations, the fallen stock scheme and the local hunt have agreed a collection price and the collection scheme will go ahead. As the Minister for Rural Affairs and Local Environmental Quality said in his opening speech, there is no reason for the hunt on the Isle of Wight to disband. The Countryside Alliance has said that, as long as hunts stay within the law, many will be able to continue and to generate more income by taking part in the fallen stock scheme.

Bill Wiggin: Will the Minister give way?

Ben Bradshaw: No, I am terribly sorry, but I have only 10 minutes in which to wind up, and the hon. Member for North Wiltshire (Mr. Gray) did not take interventions either.
	My hon. Friend the Member for Wantage and the hon. Members for Taunton (Mr. Flook), for Hexham (Mr. Atkinson) and for Bridgwater (Mr. Liddell-Grainger) raised the serious issue of bovine TB, on which I do not intend to spend a great deal of time, but it is important to say that this has been our first opportunity to discuss the issue following the publication, finally, of the results from the four area trials in the Irish Republic. We will of course take seriously any lessons to be learned from those trials, but it is important that hon. Members recognise that the situation in Ireland is rather different from that in the United Kingdom.
	The scientists who conducted the Irish trials have said that the proactive culling that achieved the reduction in TB breakdowns in cattle is not a viable policy for the Republic of Ireland, so whether it would be viable in the UK is also open to question. I have asked the Independent Science Group to examine the results of the Irish trials to see whether anything can be learned from them. I accept that those trials have changed the debate. They have taken us away from the debate on whether culling badgers can help to tackle TB. We must now ask whether culling badgers in the way that was done in the Irish trials would be viable, cost effective and politically acceptable. Those are questions that all parties in the House will have to grapple with over the next few weeks.
	Several hon. Members talked about the general state of farming, and it is important to recognise that it has gone through a difficult time for a number of reasons, although incomes have, in fact, risen by 80 per cent. from the low that they reached in 2000. We recognise that there are particular pressures on the dairy industry. Those problems were raised by the hon. Member for St. Ives (Andrew George), and my hon. Friend the Member for Monmouth (Mr. Edwards) talked about them in some detail. My hon. Friend quoted an article from this week's farming press, saying that he felt that there was a new spirit of optimism in the industry. I think that he is right, although we should not overlook some of the serious challenges faced, especially by the dairy industry.
	The hon. Member for St. Ives pointed out that we are awaiting the outcome of the latest Office of Fair Trading report into supermarkets. We will study that report with interest. The Government have certainly not ruled out the need for further action if the report shows that there are problems that need to be addressed, although previous reports of this kind have not done so. In fairness to the hon. Member for South-East Cambridgeshire (Mr. Paice), I should mention that he pointed out the positive role that supermarkets play in rural areas. They provide a service to rural people and offer them a much greater choice than previous generations ever had. I am as keen as he is, however, to make sure that they do not use their powerful position to the detriment of the farming industry.
	One of the important statistics to remember when we debate the state of the dairy industry is the extremely big difference in profitability between some dairy producers and others. My constituency is urban, not rural, but I know farmers outside Exeter, and have friends who are farmers outside Exeter, and they tell me that there are huge differentials in the success of dairy farmers, both in terms of added value and costs. The differential that dairy farmers experience is 12p per litre, which does not indicate to me that this is just a problem of supermarkets and price. It is also a challenge to the industry to get to the level at which all are making those sorts of profits.
	Several hon. Members talked about CAP reform. It is right to point out, as did my hon. Friend the Member for Stafford (Mr. Kidney), that although there was a lot of talk in the Conservative party, over many years, about the importance of CAP reform, this Labour Government delivered that historic CAP reform back in the summer of 2003. It has been an incredibly complex issue, but we have discussed it with the farming community all along. One of my other hon. Friends pointed out that the farming industry was not united on how it wanted CAP reform to be implemented, but we have gone out of our way, all along, to take the farming industry with us, to listen to those voices and to try to devise a system that we thought was fair and that would deliver the public goods that were mentioned.
	It was characteristically generous of the hon. Member for St. Ives to say that he thought that we had struck the right balance. His questions about the timing of the implementation of the single farm payment have been dealt with. We are confident that we can still do that early in the window that we have set out. I also note that, as was pointed out, in all the criticisms from the official Opposition on the single payment and the way in which it has been implemented, I did not hear a coherent alternative, and I never have done. We have heard such criticisms time and again in the House, but we are still waiting for a coherent alternative.
	A number of other issues were raised, to which I have not got time to respond in detail now, but I will write to the Members concerned. The hon. Member for Bridgwater mentioned bees, and the hon. Member for South-East Cambridgeshire referred to reform of the sugar regime and the important area of biomass and the future of biofuels, to which the Government are committed.
	In general terms, however, I was astonished that in a debate that was supposed to be about rural communities, the hon. Members for South-East Cambridgeshire and for North Wiltshire said almost nothing about employment, the environment, biodiversity, the health service, crime, schools, housing, poverty, transport or the overall economy. Are not those issues important for people who live in rural areas, as they are for people who live in urban areas? My region, the south-west, is largely rural, and has been perhaps disproportionately dependent on agriculture historically. It has also been the fastest growing region in the whole of England in the last three years. Nothing was said about the success delivered by this Labour Government to the economy and public services in rural areas.
	In the constituency of the hon. Member for North Wiltshire, there are now 2,365 more nurses, and 849 more doctors, in his strategic health authority area. North Wiltshire has 290 more teachers than in 1997, and Wiltshire has 63 more police officers. Unemployment has fallen 63 per cent. since 1997. None of that was mentioned in the criticisms that he levelled.
	That comes on top of announcements this week in the Conservative party's so-called James review, the Conservative Front-Bench's failure to stand up to their party leader and shadow Chancellor, unlike some other shadow Ministers, and to defend the savage cuts that the Conservative party now proposes to make in DEFRA's budget

David Maclean: rose in his place and claimed to move, That the Question be now put.
	Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:
	The House divided: Ayes 189, Noes 322.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):
	The House divided: Ayes 308, Noes 182.

Question accordingly agreed to.
	Mr Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House welcomes the Government's commitment to farming and rural communities set out in the Strategy for Sustainable Farming and Food and Rural Strategy 2004; applauds the Government's commitment to invest more than 500 million over three years in sustainable food and farming; commends the reforms of the Common Agricultural Policy secured by the Government in June 2003, which will be implemented at the earliest possible opportunity in 2005; congratulates the Government's record on public service delivery in rural areas; further commends the 239 million allocated over six years to 200304 through the Rural Bus Subsidy Grant for new and improved rural transport services; further applauds the increase in the resources available for regional development agencies to regenerate the rural economy; further welcomes schemes in place to provide affordable housing in rural areas; praises the efforts to retain the rural post office network; further congratulates the Government's action to protect and enhance the rural environment; and calls upon the Government to continue pursuing a strategy based on long term policies to regenerate British agriculture, improve rural services and revitalise the rural economy as a whole.

DEFERRED DIVISIONS

Motion made, and Question put forthwith, pursuant to Standing Order No. 41(A)(3)(Deferred divisions),
	That, at this day's sitting, Standing Order No. 41A (Deferred Divisions) shall not apply to the Question on the Motion in the name of Mr Peter Hain relating to the Electoral Commission.[Mr. Watson.]
	Question agreed to.

ELECTORAL COMMISSION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) and Order [21 December 2004],
	That an Humble Address be presented to Her Majesty, praying that Her Majesty will re-appoint as Electoral Commissioners, with effect from 19th January 2005:
	(1) Pamela Joan Gordon for the period of two years; and
	(2) Sir Neil William David McIntosh KBE for the period of three years.[Mr. Watson.]
	Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Local Government

That the draft Local Authorities' Plans and Strategies (Disapplication) (England) Order 2005, which was laid before this House on 10th January, be approved.[Mr. Watson.]
	Question agreed to.

PUBLIC PETITIONS

Resolved,
	That this House approves the recommendations in paragraphs 5 and 8 of the Fifth Report from the Procedure Committee, Session 200304, on Public Petitions (HC 1248).[Mr. Watson.]

DELEGATED LEGISLATION

Mr. Deputy Speaker: With the leave of the House, I will take together motions 5 and 6.
	Ordered,

Emergency Services

That the Fire and Rescue Services (National Framework) (England) Order 2004 (S.I., 2004, No. 3217), dated 7th December 2004, be referred to a Standing Committee on Delegated Legislation.

Local Government Finance

That the Non-Domestic Rating (Small Business Rate Relief) (England) Order 2004, (S.I., 2004, No. 3315), dated 14th December 2004, be referred to a Standing Committee on Delegated Legislation.[Mr. Watson.]

SCHOOL PLAYING FIELDS

Motion made, and Question proposed, That this House do now adjourn.[Mr. Watson.]

Liam Byrne: I thank the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Halton (Derek Twigg), for attending this debate on the sale of school playing fields, and I welcome him to his place. This is his first Adjournment debate, as it is mine, and I have no doubt that his many years of service to the people of Halton, as well as his former career at the then Department for Education and Employment, will stand him in excellent stead for his new role, and I wish him every possible success in that job.
	I am grateful to the House for the opportunity to speak on the six-months anniversary of my arrival in the House. We have achieved a great deal in Hodge Hill in that short time. We have quadrupled the number of actions taken against antisocial behaviour. We have won two extra teams of police. We are now one of just 50 Home Office action areas for the Together campaign. Most important of all, we have created a new partnership within our community in Hodge Hill that has already identified five possible crack houses, 10 gang hot spots and 30 neighbours from hell. However, I fear that, after all our work, certain forces are about to move us backwards on an issue that lies at the heart of our community: the sale of the Brockhurst road playing fields to Tesco, thus creating one more megastore for that organisation and involving the possible highway robbery of up to 80 per cent. of the cash to spend elsewhere in the city.
	I must give credit where credit is due: the Government have transformed horizons for our young people in this country. They have tightened the rules on the sale of school playing fields not once, not twice, but four times. That agenda is matched by the new vision of offering children at least four hours' sport every week in and out of school. Moreover, that vision has been backed by cash: more than 1 billion is flooding into physical education and school sport between now and 2006. However, I can only wish that the Government's commitment was matched by that of Birmingham city council, and I need to give the House a very brief history of the development of the dangerous scheme to tarmac over the green fields on the Brockhurst road.
	The development was first proposed some 12 years ago, but the local action plan for Hodge Hill was clear that only one large food store should be built. It said that there should not be a megastore, that nothing should be built on playing fields and that such fields should not be declared surplus to requirements. Indeed, the plan set out clearly:
	Any future applications that incorporate part or all of the playing fields in development proposals are likely to be refused.
	That was the position until last year, when after 12 years of the community successfully resisting change, the new Tory-Liberal administration gave the green light for a new local development plan that provided for a 55,000 sq ft megastore that swallowed up nearly a fifth of the playing fields. It backed that up with a cabinet commitment to declare the fields surplus to requirement after the simple presentation of a satisfactory plan from Tesco. Did the new cabinet ask the local residents action group for its advice? Did it call local councillors to ask their views? Did it talk to one local resident? Not a bit of it. It even refused to table the report from the residents action group at the meeting at which the deed was done.
	I do not want to overstate the case, but I do not need to. The fields in question are technically detached educational playing fields. Following decades of underinvestment, local schools have been reluctant to use them due to the lack of changing facilities on site. Additionally, the proposal will not swallow all the pitches. However, the pitches are rough diamonds because they are of fantastic quality. They are dead flat, never waterlogged and so good that the Aston Villa ladies team considered training on them at one point. That explains why the pitches are in heavy demand from local sports clubs such as Sporting FC, which is exactly the sort of community organisation that is crucial if the Government's out-of-school sport agenda is to be delivered. Its club secretary, John Abbey, has worked tirelessly to oppose Tesco's application.
	A second argument against the proposal is the fact that the overwhelming power of Tesco could wipe out all the local traders in the neighbouring Fox and Goose shopping centre. My inquiries to the Office of the Deputy Prime Minister before Christmas uncovered a stunning report. It was unequivocal in saying that such megastores undermine traditional businesses such as food shops, newsagents, off-licences and clothing and footwear stores. Those are exactly the kind of stores that currently make up the Fox and Goose. What chance will such local stores, rich in goodwill, stand against a company that makes nearly 4,000 profit every single minute of every day?
	A further argument against the proposal is its impact on local roads, which are already some of the most dangerous in Birmingham. Communities throughout the country have interesting stories to tell about promises on traffic that are never delivered, but although local councillors in Hodge Hill proposed a neighbourhood renewal fund initiative to study the traffic impact independently, it was stopped by the new Tory-Liberal administration when it froze NRF projects throughout the city.
	Worse still, today a new report on air quality in Birmingham shows that our community is on course to fail targets on nitrogen dioxide levels because of traffic. As Councillor John Clancy, who has ably chaired the local Fox and Goose focus group for several years, rightly says, at a time when we want to cut fumes and protect our green spaces, it is odd that we are trying to suffocate one of our green lungs.
	I know that the Minister has not received a planning application and that he is not in the business of speculating, but I think that this is a clear case of a development that is not in a community's interest, so I want to flag in his mind the fact that there are strong reasons why he should oppose the proposal, if and when he sees it. I know that under new PPG17 guidance, planners must show that land is surplus to requirements, but paragraph 10 of the guidance says that developers must consult the local community and show that
	their proposals are widely supported by them.
	In Hodge Hill, the city council might be prepared to declare that the fields are surplus to requirement, but the developers certainly cannot show that the plans have widespread support. Council polls show that 55 per cent. of people support the idea, but I dispute that figure because my polls show that 58 per cent. are against it. It would be useful if the Minister would clarify the metrics for community support that must be demonstrated in such cases.
	No Minister in this country is above the law, so if my hon. Friend says that Birmingham city council must decide and he has no power to stop it, I will say that the law is at fault. I would not want him to break it, however, especially so early in his post. However, if that is the scenario, I ask for his help to ensure that the proceeds benefit the local community. The Minister's predecessor told the House on 8 December 2004 that 80 per cent. of playing field sales that did not involve school closures led to the provision of much better local facilities, but that is not Birmingham city council's game plan. I have learned that the sale proceeds from the deal will total between 2 million and 3 million, with section 106 money on top of that, but will that be spent in the locality? Not a bit of it. When Councillor John Clancy put that question to Birmingham city council in the regeneration scrutiny committee last week, the council said that not only would the capital receipts be going elsewhere, but a portion of the section 106 money would be placed
	into an accrual account and would remain there until called upon
	to be spent
	in those areas where there was a shortfall in service provision.
	That is from a council that is sitting on a single capital pot fund of 233 million. That is from a council with a prospective section 106 pot of 70 million, of which 23 million is already in the bank. In other words, that is from a council with zero stars for children's services and a triple A bank balance, and that is why we need the Minister's help.
	Last year, the Minister's predecessor, my hon. Friend the Member for Enfield, Southgate (Mr. Twigg), helped me with an answer to my questions about any proceeds from the sale of the Brockhurst Road playing fields. He said
	that any sale proceeds must be used to improve outdoor sports provision wherever possible;
	in other wordsI would welcome the Minister's confirmation of my interpretation100 per cent. of the proceeds must be earmarked for sports provision. His predecessor went on to say that
	there is no requirement to use the proceeds from the sale of school lands to provide local community facilities.
	I would argue that that is the opportunity for progress tonight.
	I would welcome the Minister's exploring whether he could consider the following simple three-point plan: first, to require, where he sees fit, the local authority and the local police to present their assessment of the adequacy of services for young people in a community before deals such as this are approved; secondly, to acquire the right for the Minister to stipulate where money is spent if it is clear from the assessment that youth services in a community are not up to scratch; thirdly, to update regulations on the sale of playing fields to bring them into line with restrictions on the sale of school-owned playing fields. As the Minister knows, although we have been tremendously successful in reducing the sale of school playing fields, down to just 14 last year, the level of sales of playing fields is still quite high. The Secretary of State for Culture, Media and Sport told the House last March that there had been 807. Many of those sales helped to contribute about 200 million to new investment in sport, but many did not.
	I suspect that the Minister can already hear the howls of protest from the Local Government Association, but that is a 15 million lobbying organisation. The people of Hodge Hill have only me to speak on their behalf in this House, and they will not abide a gain drain from our community where deals are done with developers and the money banked away to make good service failure elsewhere.
	I recognise that that is an ambitious agenda, and I do not expect or ask the Minister to give definitive answers tonight, but I would be grateful if he undertook to consult colleagues in the DFES, the Home Office, the Department for Culture, Media and Sport and the Office of the Deputy Prime Minister, and come back to the House with a considered view. One opportunity to do so may well arise from the forthcoming youth Green Paper. This morning at half-past 10, the Minister for Children, Young People and Families, my right hon. Friend the Member for Barking (Margaret Hodge), underlined the Government's commitment to young people and reminded us that if we talk to any mum or dad, we find that what they say would most improve family life is the provision of places to go and things to do. If we talk to any teenager, we find that they voice the same plea. That is the broader point of principle, which is why I bring the matter to the Floor of the House.
	Sport is not only vital in our war on yobs; it is vital to the future of our young people. Seven million adults and 5 million children play football in our country, but FA research shows that we need 2 billion of investment in grassroots facilities, such as the fields of Brockhurst, just to keep up with the current demand to play the game. If we are to be successful in prosecuting our war on antisocial behaviour, we have got to give young people more to do, and sport is one of the most effective ways known to policy makers of diverting youngsters away from crime.
	Moreover, when I talk to head teachers, and great educationalists such as George McHugh, the outstanding head teacher of Washwood Heath technology college, who I very much hope will serve our community for some years to come, they say to me that sport is vital to the development of our children's characters. Our young people deserve our investment. This is a Government who have made great strides in the last seven years. I urge the Minister to finish the job and, in so doing, to stand on the side of our community in Hodge Hill.

Derek Twigg: I congratulate my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) on securing this debate on an issue that is important nationally and locally. In the short time that he has been here he has already proved himself a strong advocate for his constituents and a hard-working MP.
	We have not yet received an application from Birmingham city council in respect of the Brockhurst playing fields. Even so, I am sure that my hon. Friend realises that I could not, in any case, comment on the merits of any particular application before my right hon. Friend the Secretary of State for Education and Skills has had an opportunity to consider it, as decisions on such applications may be subject to challenge in the courts.
	However, an application is required only if the land has been used as playing field by any maintained school in the 10 years before the date of the proposed sale. I understand that there may be some doubt about whether the Brockhurst playing fields have been used as school playing fields in the last 10 years, and that Birmingham city council is looking into the question. If they have been used, Birmingham city council will require permission from my right hon. Friend the Secretary of State for Education and Skills before it can sell them. Any application to sell the playing fields will be considered against the same criteria as all similar applications.
	I am pleased to have the opportunity to set out the Government's position on the protection of school playing fields. I believe that the Government's record is exemplary. Before 1998, there was widespread concern about the indiscriminate sale of school playing fields. There was no protectionnothing to stop local authorities selling off school playing fields and using the money for whatever they wanted. No one even bothered to monitor how many were being lost, so we will never know the true extent of the folly. By contrast, we recognised and shared the widespread concern about school playing fields, which is why in October 1998  we introduced the first ever legislation to stop the indiscriminate sale of school playing fields. Authorities must now seek the consent of my right hon. Friend the Secretary of State before they can sell off any school playing field.
	Contrary to what many people appear to believe, we never promised to stop the sale of school playing fields altogether. What we said was that we would bring to an end the policy of forcing schools to sell their playing fields. We have fulfilled that commitment. There has been a massive investment in school buildingsit has increased from 683 million in 199697 to 4.5 billion in 200405, and it will increase further, to 6.3 billion by 200708. It has increased sixfold in real terms over that period. Direct capital funding to all schools will exceed 1 billion by 200708, when a typical secondary school will receive about 113,000 and a typical primary about 34,000. All local education authorities and diocese will benefit from substantial delegated funding for their local priorities and needs. Schools therefore no longer have to sell off their playing fields to pay for repairs.
	However, not every part of every school playing field will always be needed. Some fields are genuinely surplus to school and community needs, particularly if the school has closed. In such circumstances, it makes sense to permit the sale of such surplus or unwanted assets and to reinvest the proceeds in better sport and education facilities. In July 2001 we set up the School Playing Fields Advisory Panel to provide expert advice. That independent panel is made up of key organisations with a keen interest in playing fields: it includes representatives from the National Playing Fields Association, the Central Council of Physical Recreation, the education organisation Learning through Landscapes, the National Association of Head Teachers and the Local Government Association.
	The panel provides independent advice on the extent to which applications to dispose of school playing fields meet the published criteria. All applications are considered against three main criteria: first, that playing field provision and curriculum requirements at the school making the disposal and at other schools in the local area are met; secondly, that community use of a school's playing fields is taken into account, with alternative facilities made available if necessary; and, thirdly, any sale proceeds must be used to improve outdoor sports provision wherever possible. No application will be approved unless it meets all three criteria.
	The result has been a steady year-on-year decline in the number of applications to dispose of school sports pitches, down from 41 in 199899 to only 17 in 200304. I mention sports pitches because that is what most people see when they think of school playing fields. The sports pitches that we talk about in our figures refer to those school playing fields capable of forming at least a small football pitch of only 2,000 sq m. I understand that that is the smallest size of sports pitch recommended by the Football Association for children under 10.
	Between April 2003 and March 2004, which is the last complete financial year, the Department received only 17 applications that would result in the loss of playing fields capable of forming at least one of those small sports pitches. In nine cases, schools no longer used the playing fields. Of the 17 applications, three have been withdrawn and 13 approved. We are still scrutinising the remaining application. Of the 13 approved applications, six concerned redundant playing fields at closed schools that were not wanted by any other local schools. In six of the other seven cases at operating schools, the sale proceeds are to be used to provide new or improved sports facilities, such as all-weather pitches, new sports halls or better grass pitches. In one of these cases, the land itself is to be used for improved sports facilities. In the remaining approved case at an operating school, the proceeds are to fund better education facilities at the school.
	Last year, in partnership with the National Playing Fields Association, we strengthened the criteria yet further to make it crystal clear that the sale of a school playing field should be a last resort, that proceeds must be used to improve outdoor sports facilities wherever possible, and that new facilities must be sustainable for at least 10 years. That provides the greatest ever protection for school playing fields. In the current financial year, only 10 applications have so far been lodged, compared with 41 in 199899 and the hundreds or perhaps thousands that were lost in the 1980s and early to mid-1990s, before we acted.
	The Government's school sports strategy, jointly led by the Department for Culture, Media and Sport and the Department for Education and Skills, is to build a national infrastructure investing in human capital, to transform PE and sport; to make a step change improvement to school sports facilities; to deliver professional development to enhance expertise and subject knowledge; to strengthen links between schools and clubs to create a culture that supports children's participation in sports clubs and offers young people leadership and volunteering opportunities to improve their skills and employability; to ensure better support for our most talented young athletesour future Olympiansto help them excel in sport and education; and to provide the strongest ever protection of school playing fields.
	School sport has a proven and essential role to play in raising standards and improving the health of the nation, not least by tackling childhood obesity. That is why protecting school playing fields is a major factor in our strategy. However, there are still concerns about even the small number of school sports pitches that are being lost. People should remember that almost half the cases being approved involve playing fields at closed school sites. These are unused by schools, and it is far better to release the capital investment put into them by schools and education authorities and to put that funding back into better, modern school sports and educational facilities that are fit for the pupils of today. Sale proceeds are ploughed back into providing all-weather pitches, better grass pitches, modern sports halls, multi-use games areas, and modern playgrounds for younger pupils. Where schools already have access to first-class facilities like these, the proceeds must be used to provide better educational facilities, such as new schools, new and better classrooms, and language and science suites.
	I take the opportunity to dispel another myth. We have never allowed any operating school to sell off all its playing fields. Where applications involve pitches at operating schools, the land must be genuinely surplus. We do not allow schools to sell land that they need. They must keep at least the statutory amount set out in the Education (School Premises) Regulations 1999.

Peter Kilfoyle: I am loth to intrude on my hon. Friend's excellent presentation of policy, which is no less than we would expect, but when considering the loss of school playing fields, will he consider the Dixie Dean field in my constituency, which he knows well and which is being sold off for the purpose of building a new academy?

Derek Twigg: I shall speak to my hon. Friend outside later.
	We are often asked why so few applications to dispose of school playing fields are rejected. The answer is that local authorities and schools pursue only those that they consider meet the tight rules that we have put in place. There is no point in their putting forward applications that they know do not meet the criteria. The main point is that the number of applications has declined, not that the number of applications rejected is low. We should not, therefore, read anything into the fact that few applications are rejected.
	In conclusion, a great deal has been done, and continues to be done, to protect school playing fields. We are also investing heavily to support PE and school sport. Between 2003 and 2008, we will have invested more than 1.5 billion to boost PE and school sport. We are promoting a massive expansion of the specialist sports college and school sport partnerships programmes. We aim to have 400 sports colleges or academies with a sports focus by 2006that is one in nine of our secondary schools. Clustered around each sports college we are establishing a network of school sport partnershipsfamilies of schools that receive additional funding to enhance sports opportunities for all children. More than 50 per cent. of schools in England are already within the network of created partnerships.
	More than 1,700 secondary co-ordinators and 10,300 primary and special school link teachers have been appointed and are in place within the partnerships. They are sharing best practice, organising competitions and activities, and building and strengthening subject leadership, particularly in the primary sector. By 2006, all maintained schools in England will be within a school sport partnership.
	PE and sport have an important role to play in raising standards. Work undertaken by the Qualifications and Curriculum Authority has shown how placing PE and sport at the heart of a broad and balanced curriculum can improve attendance, behaviour and attainment. PE and school sport build self-esteem, teamwork and leadership skills. PE and sport are also important because they can help build an inclusive society, raise levels of participation in sport after pupils leave school and positively affect the health of the nation.
	That is why PE is compulsory within the national curriculum at all key stages for all pupils, and that is why there is a statutory duty on education authorities to provide access to at least a minimum amount of team game playing fields, based on the type of school and the number of pupils. That is also why we put so much emphasis on protecting the playing fields that schools use and re-investing proceeds whenever possible into giving schools first-class sports facilities.
	Our policies not only ensure that schools keep the playing fields they need to meet their own future needs, but the needs of their neighbouring schools. We will continue to work with our partners in the education, voluntary and local government sectors to keep our policies under review to ensure that all pupils have access to the best school sports facilities that schools and authorities can provide.
	Question put and agreed to.
	Adjourned accordingly at nine minutes to Eight o'clock.